How Kim Kardashian Reared Up In A Crypto Scam

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Celebri­ty and socialite Kim Kar­dashi­an and retired pro­fes­sion­al box­er Floyd May­weath­er have been named as defen­dants in a law­suit over a cryp­to scam. The two, along with for­mer NBA star Paul Pierce, are being sued over alle­ga­tions that they mis­led investors over a cryp­tocur­ren­cy scam asso­ci­at­ed with the Ethereum­Max token. The token has a price of $0.00000001904 though it had reached an all-time high price of $0.0000008546 last year in May.

What is the law­suit about?

A class action law­suit filed in the US Dis­trict Court for the Cen­tral Dis­trict of Cal­i­for­nia states that the stars, along with the devel­op­ers of Ethereum­Max, con­spired to arti­fi­cial­ly increase the price of the token before sell­ing it off and crash­ing the price. These types of pump and dump scams are com­mon in the cryp­to world.

All three named in the law­suit pro­mot­ed the token in var­i­ous ways and instances on social media. Addi­tion­al­ly, the name of the token, Ethereum­Max, sug­gests a con­nec­tion to the sec­ond most pop­u­lar token Ether and its blockchain Ethereum but the Etheureum­Max token has no con­nec­tion to the for­mer two. The token was only around for less than a few months when the celebri­ties had made their endorsements.

What did the celebri­ties do?

Kar­dashi­an had shared a post on her Insta­gram account, which is fol­lowed by 250 mil­lion indi­vid­u­als, about the token.

“Are you guys into cryp­to???? This is not finan­cial advice but shar­ing what my friends just told me about the Ethereum Max token! A few min­utes ago Ethereum Max burned 400 tril­lion tokens — lit­er­al­ly 50% of their admin wal­let — giv­ing back to the entire E‑Max com­mu­ni­ty,” Kar­dashi­an had posted.

She had tagged the post with the hash­tag ‘ad’ and esti­mates indi­cate that Kar­dashi­an could have earned any­where between $500,000 and $1 mil­lion based on her fee for pro­mot­ing prod­ucts on her social media platform.

May­weath­er has pro­mot­ed the token mul­ti­ple times in the past. He had pro­mot­ed the token dur­ing the Bit­coin 2021 Con­fer­ence in Mia­mi, and even accept­ed the token as pay­ment for his box­ing match with YouTu­ber Jake Paul.

Pierce pro­mot­ed the Ethereum­Max token over mul­ti­ple Twit­ter posts that had gone viral subsequently.

Ethereum­Max devel­op­ers protest

The devel­op­ers of Ethereum­Max token, how­ev­er, have denied all allegations.

“The decep­tive nar­ra­tive asso­ci­at­ed with the recent alle­ga­tions is rid­dled with mis­in­for­ma­tion about the Ethereum­Max project. We dis­pute the alle­ga­tions & look for­ward to the truth com­ing out,” the Twit­ter account of the token posted.

“This project has prid­ed itself on being one of the most trans­par­ent and com­mu­nica­tive projects in the cryp­tocur­ren­cy space. We dis­pute the alle­ga­tions and look for­ward to the truth com­ing out,” a spokesper­son told CNBC.

Celebri­ties and oth­ers have been crit­i­cised for pro­mot­ing cryp­tocur­ren­cy tokens, among oth­er cryp­to assets, to their mil­lions of followers.

Charles Ran­dell, Chair of the UK’s Finan­cial Con­duct Author­i­ty, had crit­i­cised Kar­dashi­an for her asso­ci­a­tion with the Ethereum­Max token dur­ing a speech at Cam­bridge Inter­na­tion­al Sym­po­sium on Eco­nom­ic Crime last year.

“There is no short­age of sto­ries of peo­ple who have lost sav­ings by being lured into the cryp­to­bub­ble with delu­sions of quick rich­es, some­times after lis­ten­ing to their favourite influ­encers, ready to betray their fans’ trust for a fee,” said Randell.

(Edit­ed by : Shoma Bhat­tachar­jee)



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