We stand out in a recent post The clear intentions of the regulators to bring more order to the cryptocurrency industry this year. However, the last three weeks have shown that private litigants are not waiting for regulators to rein in suspected bad actors in the crypto market. Two new high-profile lawsuits target what the plaintiffs call fraudulent activity in this booming industry.
First, claiming that a publicly traded cryptocurrency company's "platform is a house of cards, built on false promises and factually impossible representations that were designed specifically to take advantage of the cryptocurrency craze, to the direct detriment of any investor." common", presented the lawyers. a putative Christmas Eve class action lawsuit against Voyager Digital Ltd. and its subsidiary, Voyager Digital LLC.
The allegation claims that the Voyager companies made false representations, including allegedly spurious statements that their cryptocurrency platform is โ100% fee-freeโ and that customers will receive the best possible price on their cryptocurrency exchanges. As a result, according to the complaint, the defendants have reaped billions of dollars in new income from people with little or no investment experience.
The complaint also claims that Voyager failed to disclose that it intentionally set the price on its platform high enough to charge โexorbitant hidden feesโ on each cryptocurrency trade, and that the price of the trade was, in fact, more expensive than that of Crypto. trading on other platforms. .
Mark Cuban, owner of the NBA's Dallas Mavericks, is one of the main stakeholders in Voyager. The complaint alleges that he made comments at a press conference specifically targeting unsophisticated investors โwith false and misleading promises of high profits in the cryptocurrency market.โ
The plaintiffs' attorneys suing the Voyager Defendants intend to represent both a national class and a separate Florida class. The putative class nationwide will assert that Voyager violated the New Jersey Consumer Fraud Act and is also responsible for unjust enrichment. The Florida class, which will allege violations of the Florida Deceptive and Unfair Trade Practices Act, would consist of individuals who used the trading platform to place cryptocurrency investment orders. The lawsuit is pending in the Southern District of Florida.
Meanwhile, in a separate class action lawsuit filed earlier this month in the Central District of California, Kim Kardashian and boxer Floyd Mayweather face allegations that they misled investors by promoting a little-known cryptocurrency called EthereumMax to their millions of followers online. social networks. That class action lawsuit accuses EthereumMax and its famous promoters of artificially inflating the price of the token by making "false or misleading statements" in social media posts.
An Instagram post by Kardashian last year promoted the EthereumMax cryptocurrency, allegedly spurring a substantial amount of investment activity by unsuspecting investors. "Are you guys into crypto??" Kardashian wrote. "This is not financial advice, but to share what my friends just told me about the Ethereum Max token!" Kardashian proceeded to lavish praise on this new currency.
Mayweather endorsed the token in his boxing match with YouTube star Logan Paul. EthereumMax was, in fact, accepted as payment for tickets to the event, a move that the lawsuit claims led to significant increases in trading volumes. Mayweather also allegedly promoted EthereumMax at a major bitcoin conference in Miami, reportedly doing so without disclosing that he was being compensated for his statements about the token.
The lawsuit claims that the named plaintiff, a New York resident, and other investors who purchased EthereumMax tokens between May 14, 2021 and June 17, 2021, suffered losses as a result of the conduct of the celebrities. EthereumMax has lost around 97% of its value since the beginning of June, leading to accusations that it is a "scam" and/or a "pump and dump" scheme.
EthereumMax has "no connection" to ether, the second-largest cryptocurrency, the lawsuit claims. The lawsuit indicates that the company name may be an attempt to mislead investors into incorrectly believing that the token is part of the Ethereum network.
Whatever the merits of these and other recent legal actions, there is no doubt that crypto companies, and their promoters, do not simply need to be in tune with anticipated new regulatory edicts and scrutiny. They should also be wary of lawsuits alleging misrepresentations of value and exaggerations of potential investment returns. In that sense, the โWild Westโ cryptocurrency is only getting wilder.
