With the ever-increasing number of scams occurring in the cryptocurrency space investors are starting to take matters into their own hands.
Ryan Huegerich, a New York resident, and other claimants filed a class-action lawsuit against Kim Kardashian, Floyd Mayweather Jr, and Paul Pierce in a California district court, for promoting an Ethereum knockoff, Ethereum Max (EMAX), according to a lawsuit filed on January 7.
The investors acquired EMAX tokens between May 14, 2021, and June 27, 2021, and the complaint was placed on classaction.org, which serves as a consumer resource for class action litigation.
“Defendants touted the prospects of the Company [EMAX] and the ability for investors to make significant returns due to the favorable ‘tokenomics’ of the EMAX Tokens,” the complaint said.
Unknown entities behind the knockoff coin
Apart from suing the celebrities, New York resident Huegerich is also suing the as-of-yet unidentified business body that is behind the EMAX tokens.
“Plaintiff will identify the appropriate Corporate Defendant through discovery of the Executive Defendants,” according to the complaint.
The EMAX cryptocurrency reached an all-time high of $0.0000008546 in May of last year, however at the time of publication, it was trading at $0.0000000197, roughly 97% less than that figure.
The EMAX token was promoted to Kardashian’s Instagram followers in June via a post in which she asked:
“Are you guys into crypto???? This is not financial advice but sharing what my friends just told me about the Ethereum Max token!”
When compared to other types of investors, celebrities and influencers are more likely to be sought after by cryptocurrency investors, with Kardashian’s EMAX promotion via Instagram having a 19% conversion, as per the Morning Consult survey results.
“A striking 19% of respondents who said they heard about the post invested in Ethereum Max as a result,” the global data intelligence company’s Managing Director Charlotte Principato revealed.
In September 2021, the chairman of the Financial Conduct Authority in the United Kingdom, Charles Randell, slammed Kardashian’s for pushing the risky token. He claimed this: “may have been the financial promotion with the single biggest audience reach in history.”
Mayweather and Pierce are also being sued
When Pierce promoted EMAX, he did it in the form of a Tweet, last May, in which he poked fun at his old employer ESPN. While, during an exhibition boxing bout in which he met the YouTuber, Logan Paul, Mayweather wore a shirt with the EthereumMax logo on it.
The plaintiffs alleged the Defendants marketed the EMAX Tokens to investors so that “they could sell their portion of the Float for a profit,” whether anything comes from the lawsuit remains to be seen.