It appears that rug pulls in cryptocurrency markets are becoming increasingly more common, with even celebrities taking part in the action.
According to a class action lawsuit filed in the Central District of California, Kim Kardashian, Floyd Mayweather, and Paul Pierce are being accused of making misleading promotions over EthereumMax, an Ethereum cryptocurrency knockoff that investors purchased between May 14, 2021 and June 27, 2021. The complaint alleges that the defendants made false claims to their fans and followers in an effort to persuade them to buy into the cryptocurrency platform, which the accused then exited with significant gains once the tokens rose in value.
Once the celebrities took off with their earnings, the investors were left with an almost-worthless token and substantial financial losses, since no lockup period existed that would restrict the promoters from selling the tokens they received in exchange for their advertising activities. As per the suit, EthereumMax jumped by more than 1,370% after Kardashian promoted the token to her some ~251 million Instagram followers. Shortly after, though, the token plummeted over 98%, without ever recovering.
Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.