This is not the first time that celebrity-promoted coins have proven to be a tool that works against investors. The result is that Kim Kardashian, facing a class action lawsuit, will stand trial for improper practices surrounding the promotion of the EthereumMax (EMAX) token.
“False and misleading statements”
This is what is being alleged against the famous celebrity and reality TV character. According to investors launching the lawsuit, Kim Kardashian promoted the cryptocurrency system on a “pump and dump” basis. Kim’s actions included, for example, a post on Instagram targeting her 250 million observing fans. According to the head of the U.K.’s Financial Conduct Authority, Charles Randell, it may have been the post with the largest reach ever created to promote a financial product.
The plaintiffs claim that EthereumMax executives used celebrity statements to showcase the company’s capabilities and draw attention to the project’s supposedly beneficial tokenomics, which guarantees a high return on investment. However, according to them, the real purpose was to inflate the value of the coins and later dump them on the market to generate their own profit.
To quote part of the document provided to the court:
“As part of the scheme, Defendants presented the Company’s prospects and touted the potential for investors to earn substantial profits through the favorable ‘tokenomics’ of EMAX tokens. In fact, Defendants sold EMAX tokens to investors to reap their own benefits.”
EMAX representatives disagree with the allegations, saying they are wrong-headed. Kim Kardashian’s post, on the other hand, was meant in their opinion to “raise awareness about the project and its usefulness.”
More famous names are among the defendants
The lawsuit filed on January 7 in Los Angeles, refers not only to Kim Kardashian. Other people accused of unfair practices also include boxer Floyd Mayweather Jr. and basketball player Paul Pierce. According to the lawsuit, after Mayweather’s media attention on EMAX, the value of the token rose 1370%, only to fall to its historical lows moments later. In turn, Pierce tweeted about it, suggesting the high investment returns he made thanks to EthereumMax.
Beware of this kind of practice
One of BlockBulletin’s primary missions is to make our readers aware while remaining unbiased. Everyone makes their own investment decisions, and each one requires prior thought. There are quite a few crypto projects that are scams, or operate on a “pump and dump” basis. The people who promote them are often celebrities, getting paid for their support. Beware of such practices! Before you invest your money, first of all make a fundamental analysis of the project. This way you will protect yourself from possible losses.