Kim Kardashian and others sued for allegedly promoting crypto ‘scam’

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New York resident Ryan Huegerich is suing the company behind cryptocurrency EthereumMax (EMAX), along with the celebrities who backed it, for pushing a “pump and dump scam,” according to a new class action lawsuit in California Federal Court. . In this, he says he is acting on behalf of everyone who purchased EMAX coins – also known as ERC-20 tokens – between May 14 and June 27, 2021.

Although Huegerich has not shared how much he spent on EMAX, he claims to have “suffered investment losses as a result of the conduct of the defendants.” Those defendants include Kim Kardashian, Floyd Mayweather and former Boston Celtics star Paul Pierce – all of whom are charged with “unjust enrichment” for “aiding and abetting” EMAX. Huegerich says their actions violate California’s Unfair Competition Law, which prohibits “any unlawful, unfair or fraudulent act or practice of commerce,” as well as California’s consumer legal remedies law, according to the complaint. Representatives for Huegerich, EMAX, Mayweather and Pierce did not immediately respond to Rolling Stone’s requests for comment. A representative for Kardashian declined to comment.

The problem appears to have started less than two weeks after EMAX launched on May 14. Pierce, who had just been fired from his ESPN analyst job after posting a stripper-filled video on his Instagram, has publicly positioned EMAX as his savior during turbulent times. ” I do not need you. Got @ethereum_max, ”he tweeted on May 26, adding that he was“ released ”by becoming his own boss. “I made more money with this crypto in the last month than with all of you in a year.”

On the same day, EMAX announced that it was the ‘exclusive cryptocurrency’ to purchase tickets for the upcoming boxing match between Floyd Mayweather and Logan Paul – a pay-per-view event slated for June 6. In a press release, the company provided a link to a combat website that listed a variety of benefits for purchasing tickets with EMAX. People who spat over $ 5,000 in a single order were promised “authentic, Floyd Mayweather boxing gloves,” according to the legal complaint, which also notes that the site was offering EMAX users a discount of 10% at the cash desk, as well as exclusive access. two tickets in the front row at ringside – and the chance to win a lottery to attend “Mayweather’s official after-party”.

As of May 26, EMAX token volume had almost quintupled to around $ 44 million from the previous day. In less than 24 hours, it nearly hit $ 108 million. Days before the fight, on June 4, Mayweather and members of his entourage wore EMAX t-shirts as they attended a Bitcoin conference in Miami, according to the complaint. During a panel, Mayweather said he believed “there will one day be another cryptocurrency as big as Bitcoin”, although he did not explicitly mention EMAX at the time. He also wore a large EMAX patch on his shorts during the fight itself, the complaint notes.

Less than two weeks after the fight, Kim Kardashian reportedly posted an EMAX ad on her Instagram, where she has more than 250 million followers, as a story. “Do you like crypto ???? This is not about financial advice, but sharing what my friends just told me about the Ethereum Max token, ”read a screenshot included in the complaint. “A few minutes ago, Ethereum Mac burned 400 trillion tokens – literally 50% of its administrator portfolio, giving back to the entire E-max community.” The hashtags “#DisruptHistory”, “#WTFEmax” and “#Ad” can be seen above a scan link. But, as Slate pointed out in an article titled “Celebrity Crypto Shilling Is a Moral Disaster,” the token “was only a month old, few had heard of it, and it wasn’t even clear how. [it] was supposed to work.

In the fall, the chairman of the UK’s Financial Conduct Authority (“FCA”) Charles Randall called Kardashian’s post “the biggest financial promotion in history,” the complaint claims. , adding that he also called his post “fraudulent” and expressed the need for a “permanent and consistent solution to the problem of online fraud related to paid advertising.”

While it is not known what EMAX paid Pierce, Mayweather and Kardashian for their involvement – if any – Mayweather said at a press conference that he made $ 30 million from the patches of brand on his shorts, which also came from deals with Fashion Nova and the CBD company. Smiz.

At its all-time high, the EMAX token was valued at $ 0.000000863, up 1,370% from its initial price of $ 0.00000000005875. Shortly after Kardashian’s post, it crashed to an all-time low of $ 0.000000000017. Then, the volume of transactions “fell” to “less than a hundredth of its initial capital”, according to the class action.

Although the exact number of buyers is not listed in the lawsuit, he claims the number is in the “hundreds”. The group seeks “all actual, general, special, incidental, statutory, punitive and consequential damages and restitution,” as well as a jury trial.

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