The celebrity reality TV star and boxer are facing a lawsuitalleging they misled online followers into buying crypto as part of a “pump and dump” scheme.
Kim Kardashian and boxer Floyd Mayweather are facing a lawsuit alleging they misled online followers into buying cryptocurrency as part of a “pump and dump” scheme.
The lawsuit, filed January 7 in Los Angeles federal court, claims that the celebrities made “false or misleading statements” while promoting a crypto token sold by ethereum, or EMAX.
The company’s executives allegedly collaborated with the celebrity influencers to tout “the prospects of the Company and the ability for investors to make significant returns.”
“In truth, Defendants marketed the EMAX Tokens to investors so that they could sell their portion of the Float for a profit,” the suit adds.
Kardashian promoted an ad for ethereum last June on her Instagram account, when she had 250 million followers.
“Are you guys into crypto???? This is not financial advice but sharing what my friends told me about the ethereum max token!” Kardashian wrote.
The post included the hashtag #ad, signifying it was a paid endorsement, though it’s unclear how much Kardashian earned.
Research by Morning Consult found approximately one in five US adults heard about the crypto-themed post.
Mayweather promoted the token on several occasions, including before and during his exhibition boxing match with YouTube Star Logan Paul in June. ethereum officials touted the token as the “exclusive cryptocurrency accepted for online ticket purchasing” for the match.
The lawsuit noted the value of ethereum tokens plummeted 98 per cent from their peak by last July, within weeks of the celebrity endorsements.
The class-action complaint, which filed on behalf of New York resident Ryan Huegerich, seeks to represent individuals who bought the token between May 14 to June 27 of last year.
ethereum denied the allegations and said they “look forward to the truth coming out.”
“The deceptive narrative associated with the recent allegations is riddled with misinformation about the ethereum project,” the statement to Reuters said.
Representatives for Mayweather and Kardashian did not respond to request for comment on the lawsuit, Reuters reported.
Mayweather has faced legal scrutiny over his cryptocurrency-related dealings in the past. In 2018, Mayweather agreed to pay more than $600,000 to the SEC to settle charges that he failed to disclose payments he received for promoting an “Initial Coin Offering.”
This story originally appeared on the New York Post and is reproduced here with permission