Digital Assets
Kim K, Floyd Mayweather Facing Lawsuits Over Crypto Promotions
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Several new lawsuits have recently emerged, targeting celebrities and accusing them of misleading cryptocurrency promotions and the so-called “pump & dump.” Among them are reality TV star, Kim Kardashian, boxing star Floyd Mayweather Jr., and Paul Pierce — a former professional basketball player.
The lawsuits of this kind were common back in 2017/2018 when numerous celebrities got involved with a number of Initial Coin Offerings (ICOs). For a time, influencers were intimidated enough not to get involved with digital currency promotions. Now, the rising popularity of cryptocurrencies is drawing celebrities back into this space.
What happened?
A new lawsuit was filed on January 7th, in Los Angeles federal court. The lawsuit claims that there were several celebrities that promoted a cryptocurrency project called EthereumMax, and its token, EMAX. The lawsuit continues to claim that the celebrities were trying to boost its price by using their status and their massive communities, all for the purpose of profiting off of the projects at the investors’ expense.
EthereumMax’s executives, as well as the celebrities that participated in the promotions, allegedly made misleading statements about the projects on social media. The lawsuit specifically mentions Kim Kardashian, who promoted EthereumMax in an Instagram post published on June 2021. At the time, Kardashian promoted the project to 250 million people who followed her on the platform.
Her post asked “Are you guys into crypto?” followed by a disclaimer “this is not financial advice.” Instead, she said that the following is “what my friends just told me,” after which she proceeded to talk about the project. The post also included a hashtag #AD, that showed that the post is a paid advertisement. The head of the UK’s FCA, Charles Rendell, said last year that this post may have been the “financial promotion with the single biggest audience reach in history.”
Another celebrity who got involved with the project is Floyd Mayweather Jr. Mayweather promoted EthereumMax on his boxing trunks on several occasions, including his popular fight with a YouTuber, Logan Paul. The fight took place in June 2021, so Mayweather’s promotion took place around the same time as Kardashian’s post.
Paul Pierce promoted the same project on his Twitter account. His promotion of the project came up during a conflict with ESPN, during which he said “.@espn I don’t need you. I got @ethereum_max I made more money with this crypto in the past month than I did with y’all in a year.”
Finally, the lawsuit touched upon EthereumMax itself, causing the project to respond. EthereumMax released a statement in which it said that the allegations against the company are “riddled with misinformation,” and associated with the deceptive narrative. The project continued to dispute the allegations, stating that it will “look forward to the truth coming out.”
The project also addressed the promotions, specifically the one made by Ms. Kardashian. EthereumMax defended it, saying that it was simply intended to raise awareness of the project and its utility.
