Difficult legal situation

The number of cryptocurrencies is constantly on the rise, there are now 15,000 of them – one of them is EthereumMax, not linked to ETH and the star of a dubious advertising campaign that now has legal repercussions. While some currencies become a media success on their own thanks to prominent advocates like Elon Musk, the creators of other assets have to resort to sometimes creative means to bring their product to investors.

This is what happened to Steve Gentile and Giovanni Perone, the creators of EthereumMax, who used influencers to raise awareness of their cryptocurrency and harnessed reality star Kim Kardashian, boxer Floyd Mayweather and other celebrities to the cart of their product. With the help of their fans, the celebrities were supposed to promote EthereumMax, which they did diligently – but after EthereumMax became practically worthless after an alleged pump & dump, the celebrities are now facing allegations of fraud.

What happened?

The testimonials, who cumulatively have hundreds of millions of fans and a corresponding reach, Kim Kardashian, for example, was able to convince 19 percent of her fanbase to buy EthereumMax, according to the statement of claim. But not only this target group was addressed: heavyweight boxer Floyd Mayweather also promoted EthereumMax in 2021 – in the context of his fight against YouTube star Logan Paul and at a Bitcoin conference. His call to buy was also followed up and EtherumMax quickly gained in value. Shortly after the high-profile boxing match, the price plummeted by more than 98 percent, rendering the coin virtually worthless.

Legal repercussions

Disappointed investors have now filed a class action lawsuit in a Los Angeles court. They accuse the influencers of pump & dump – artificially increasing the demand for EthereumMax, thereby enabling the creators to sell the inflated coins at a hefty profit. This behaviour falls under fraud and is punishable by law, although the legal situation is unclear.

Gentile and Peroni deny that the promotion was a big deception. For them, it was misleading narratives and misinformation. Whether the injured parties will ever see their money again is uncertain: according to the “Guardian”, it is difficult to prosecute anyone due to the unclear legal situation in the crypto sector. First of all, it has to be clarified whether EthereumMax is a security at all. In this context, the legal dispute between Ripple and the SEC is also relevant, where this very question is at stake. Regardless of this question, however, it may be considered doubtful that the celebrities will ever be asked to pay. And there will probably be nothing left to collect from those responsible for the project either. So trust investment professionals before you let yourself be persuaded by a sportsman or an influencer to buy crypto-assets!

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