On June 14, 2021, Kim Kardashian promoted a little-known crypto company called EthereumMax to her 225 million Instagram followers. “Are you guys into crypto?” she asked.
A week later, the price of EthereumMax, or EMAX , had fallen 50% and the volume of trade in the token had dropped by nearly 75%. The price of the coin never recovered, so anyone who followed Kardashian’s advice, lost a bundle.
The reality show star’s post was the last of several celebrity endorsements EMAX had relied upon to drive up the price of the coin they had released in May of 2021, according to a class action lawsuit filed in federal court in California by numerous investors.
The suit claims that the company’s founders made big profits after cashing out right as prices jumped following online endorsements by Kardashian, former NBA star Paul Pierce and retired boxing champ Floyd Mayweather.
The investors say they only bought EMAX after learning of it through the publicity brought by Pierce, Mayweather and Kardashian’s endorsements.
“The misleading promotions and celebrity endorsements were able to artificially increase the interest in and price of the EMAX Tokens during the relevant period, causing investors to purchase these losing investments at inflated prices,” the suit argues.
Attorneys for EthereumMax’s co-founders, Steve Gentile and Giovanni Perone, didn’t immediately respond to calls seeking comment.
The suit also names Kardashian, Mayweather and Pierce as co-defendants. All three have filed motions to have them removed from the suit, arguing they had no role in how the token was issued, sold or managed. The founders of EthereumMax have also sought to have the case dismissed, although a judge has yet to rule on any of the motions.
Messages left with the attorney who filed the suit, John Jasnoch, were not immediately returned.
On Monday, Kardashian reached an agreement with the Securities and Exchange Commission to pay a…
