SKIMS mogul Kim Kardashian, former professional boxer Floyd Mayweather, have been sued for allegedly duping investors in a cryptocurrency scam. Former professional basketball Paul Pierce is also among defendants accused of duping followers in the alleged pump-and-dump scheme.
The lawsuit accuses the stars of misleading their followers, claiming that the celebrities convinced their fans to buy EthereumMax tokens, only to sell them once their value was inflated. They were allegedly paid in tokens for their sponsorships and exited with substantial gains, leaving investors holding the bag.
According to The Hollywood Reporter, the class action complaint was filed on behalf of a New York resident by John T. Jasnoch of Scott + Scott Attorneys at Law LLP, seeking to represent people who bought tokens from May 14 to June 27, 2021.
On June 14, Kardashian posted for her 250 million followers on Instagram an ad for EthereumMax, which has no connection to established cryptocurrency Ethereum. “Are you guys into crypto???? This is not financial advice but sharing what my friends just told me about the Ethereum Max token! A few minutes ago Ethereum Max burned 400 trillion tokens—literally 50% of their admin wallet, giving back to the entire e-max community. Swipe up to join the e-max community,” the Kardashian post states.
The lawsuit claims that the post had tremendous reach. A survey by financial services company Morning Consult found that up to 21 percent of all American adults and nearly half of all cryptocurrency owners had seen the ad and that 19 percent of respondents invested in EthereumMax as a result. Mayweather and Pierce had similar roles in the alleged scam, according to the lawsuit.
The complaint, which names executives at EthereumMax, alleges violations of state consumer protection laws, common law over aiding and abetting, and unjust enrichment.
Kim Kardashian landed in legal trouble previously as well, for making allegedly misleading claims in promotional endorsements. The U.S. Food and Drug Administration ordered Kardashian in 2015 to remove an ad promoting a morning sickness drug.