According to rumours, Kim Kardashian is being sued for allegedly participating in a cryptocurrency pump-and-dump fraud. Boxer Floyd Mayweather Jr. and former NBA star Paul Pierce are listed in the class-action case, filed on January 7 in a federal court in California. According to the lawsuit, the celebrities conspired with the co-founders of a cryptocurrency called EthereumMax to engage in an organized pump-and-dump scheme. A few investors boost the value of a particular currency only to sell out once new investors have bought in and contributed to the rising market price. A request for a response was made, but it was unsuccessful as radio silence commenced. According to multiple media reports this week, Kardashian, Mayweather, and Pierce have not responded to the complaint. Realistically, considering Kim Kardashian and her position in society, it seems ridiculous that 21% of the American population saw her story. She had a conversion rate of 19% of people who saw her promotion proceeded to buy this alt-coin. With conversion rates like that, it is no surprise these scammers are willing to pay her promotion post fees that can be no less than $300 000 per post and go up to over a million dollars.
The Full Picture
The class action complaint claims that a “pump and dump” tactic was employed, in which deceptive marketing was used to artificially boost the price of an asset, which was then sold at a profit to unsuspecting investors. According to a lawsuit filed in California’s Central District Court, “the company’s founders and a substantial number of celebrity backers” made “false or misleading assertions to investors about EthereumMax via social media commercials and other promotional activities.”
According to the lawsuit, the defendants “promoted” the ability of “investors to earn significant returns” by artificially inflating the price of a cryptocurrency, “inducing investors to purchase these losing investments at inflated prices,” and allowing the executive staff of EthereumMax, which is named in the lawsuit, to “sell their EMax tokens to investors for a profit.” Simply stated, the court action claims that EthereumMax’s whole business strategy is based on continual marketing and promotional activities, which are usually carried out by “trusted” celebrities, to persuade potential investors that the company’s financial prospects are solid.
According to the article, Mr. Pierce, a former NBA player, is said to have promoted EthereumMax in a “widely discussed” tweet in May 2021, “praising EthereumMax’s potential to produce money for him.”
At the same time, EthereumMax started advertising the cryptocurrency, exploiting former boxing world champion Floyd Mayweather’s boxing match against YouTuber Logan Paul to promote the cryptocurrency. At a cryptocurrency event, Mr. Mayweather was said to have expressed support for EthereumMax.
According to the complaint, reality-TV star Kim Kardashian eventually posted an Instagram comment saying, “This is not financial advice; rather, it is sharing what my friends have taught me about the EthereumMax token.”
Kim Kardashian “asked her 250 million followers to speculate on crypto tokens” in a marked advertisement, implying that the post may have been “the financial promotion with the single largest audience reach in history,” according to Charles Randell the head of the UK’s Financial Conduct Authority.
From A Pump To A Bigger Pump, All For A Dump
At the time, EthereumMax said that its marketing and public-relations efforts “are always from an awareness standpoint and not pressuring to purchase,” as the Kim K piece was only aimed at generating awareness of the project and its worth.
The business said that its marketing and public relations operations would encourage people to understand more about its project before deciding.
This method requires a significant commitment of time, effort, and money and contrasts sharply with the quick pump-and-dump tactics that are currently accessible.
According to the court filing, such promotion caused the currency’s value to rise by more than 1,300% from its initial price before plummeting to “an all-time low” just over a month after Ms. Kardashian’s post, allowing defendants to “offload” EthereumMax tokens “for substantial profits”. In contrast, many who purchased the currency during this period were left out in the cold.