Reality star turned cosmetics billionaire Kim Kardashian may be in trouble after acting as a cryptocurrency accomplice for an incomplete altcoin last summer.
Kardashian and several other celebrities, including the boxer. Floyd mayweather and basketball star Paul Pierce, are currently being sued for promoting a cryptocurrency that was reportedly worth large sums to the token's creators, but left many investors with nothing, Finbold.com has reported.
The currency in question, EthereumMax, ran a wild run in early 2021, driven largely, according to the lawsuit, by endorsements from Kardashian, Mayweather and Pierce, who were paid to promote the token. However, before long, the value of the coin plummeted, allegedly leaving many investors with a basically worthless asset.
A class action lawsuit lawsuit filed on Friday claims that this activity was part of a "pump up and dump" scheme, the age-old ploy whereby the creators of a product will artificially increase its value before secretly selling their own shares and earning a ton of cash on the market. process. after which the value of the product plummets.
The lawsuit lists both celebrities and the coin's creators as defendants and lists as plaintiffs anyone who invested in the coin between May 14, 2021 and June 27, 2021, and was "harmed by it "by the trajectory of the currency.
According to the lawsuit, after Mayweather and Pierce promoted the token during May of last year, the value of the coin apparently increased 632%. Meanwhile, Kardashian jumped into the fray in June, just a day before stocks of the coin crashed. On June 14, Kardashian was seen actively promoting the coin on her Instagram, which has some 251 million followers. His post read:
ARE YOU IN CRYPTO ????
THIS IS NOT FINANCIAL ADVICE BUT SHARE WHAT MY FRIENDS JUST TELL ME ABOUT TOKEN ETHEREUM MAX!
Kardashian added a small disclaimer revealing that the text was actually a paid ad, although it reads like a normal post. The lawsuit also cites a Morning consultation survey That showed that Kardashian's endorsement of the coin had a significant impact on the number of people who heard about EMAX, claiming that roughly 1 in 3 cryptocurrency owners saw their little commercial.
Just one day after Kim's post, on June 15, the value of EMAX plummeted 98 percent, leaving it at an all-time low of $ 0.000000017 per unit, the lawsuit says. Before the price drop, the creators of the cryptocurrency sold their EMAX shares, something that was publicly observed because they did not "block" their wallet addresses (that is, made them private) until after this period, according to the lawsuit. .
Kardashian's activity caused quite a stir, with various opinion articles written at the time on the topic of celebrities buying cryptocurrencies and how the trend could be spinning out of control. Kardashian's Instagram post was also pointed out by the head of Britain's Financial Conduct Authority (FCA), Charles Randall, who warned that it could be considered unethical behavior. "I can't tell if this particular token is a scam," Randall said at the time, though he noted that "scammers routinely pay social media influencers to help them pump up and dump new tokens on the back of pure speculation."
So yeah, none of that sounds particularly good. On the one hand, you can see why people would be mad at Kardashian and company for helping sell them what it is now basically a worthless coin. On the other hand, it could be argued that taking your speculative investment Advice from reality TV stars means you're probably just asking for it.
