The trio have been named alongside the currency’s creators in a class action lawsuit claiming that false and misleading statements were made to lure in investors.
Pump and Dump
The lawsuit filing lists a number of damning claims.This case arises from a scheme among various individuals in the cryptocurrency sector to misleadingly promote and sell the digital asset associated with EthereumMax (the EMAX Tokens) to unsuspecting investors.
The Company’s executives, collaborating with several celebrity promoters,
(a) made false or misleading statements to investors about EthereumMax through social media advertisements and other promotional activities and
(b) disguised their control over EthereumMax and a significant percent of the EMAX Tokens that were available for public trading during the Relevant Period (the “Float”).
To be clear: EthereumMax is not related to the second biggest cryptocurrency Ethereum at all. If anything, the plaintiffs chose that name as a less than transparent attempt to hang onto their rivals.
Image courtesy of Coinmarketcap.com
What Did the Celebs Do Wrong?
Kim Kardashian posted on her Instagram account to more than 250 million followers that her friends were saying positive things about the new altcoin. From what we can see she has no prior involvement in crypto and people are claiming that she has just been paid to say such."This is not financial advice but sharing what my friends tell me about the EthereumMax token."
Charles Randell, head of the UK’s Financial Conduct Authority (FCA), said this post might count as the "financial promotion with the single biggest audience reach in history", and it was marked as an advert too.
Floyd Mayweather was paid to appear at a cryptocurrency conference and spoke to the audience to promote EthereumMax.
Former NBA star Paul Pierce posted on Twitter "praising EthereumMax's ability to make money for him", back in May 2021.
Denial
EthereumMax denies any wrongdoing, claiming that it has simply tried to raise awareness of its product. The celebrities in hot water were only an extension of this promotional activity.Speaking to BBC News, EthereumMax said all of its adverts "are always from an awareness perspective and not encouraging to purchase - as the Kim Kardashian post was simply intended to raise awareness of the project and its utility".
"It is our intention that our marketing and PR efforts encourage people to research our project... before making a decision," it said.
"This approach takes a lot of time, energy, and resources and is in stark contrast to the quick pump-and-dump schemes out there."
Steve Gentile, co-founder of EthereumMax, added: "The deceptive narrative associated with the recent allegations is riddled with misinformation about the EthereumMax project. We dispute the allegations and look forward to the truth coming out."
The three celebrities in question have declined to comment.
