New York resident Ryan Huegerich is suing the company behind the EthereumMax (EMAX) cryptocurrency, as well as the celebrities who backed it, for pushing a “pump-and-dump scam,” according to a new class-action lawsuit in California Federal Court. In that, he says he’s acting on behalf of everyone who bought the EMAX coins — also known as ERC-20 tokens — between May 14 and June 27, 2021.
Although Huegerich has not shared just how much he spent on EMAX, he claims to have “suffered investment losses as a result of Defendants’ conduct.” Those defendants include Kim Kardashian, Floyd Mayweather, and former Boston Celtics star Paul Pierce — all of whom are being accused of “unjust enrichment” from “aiding and abetting” EMAX. Huegerich claims their actions violates California’s Unfair Competition Law, which prohibits “any unlawful, unfair, or fraudulent business act or practice,” as well as California’s Consumers Legal Remedies Act, according to the complaint.
Representatives for Huegerich, Mayweather, and Pierce did not immediately reply to Rolling Stone‘s requests for comment. A representative for Kardashian declined to comment. EMAX, however, provided a statement: “The deceptive narrative associated with the recent allegations is riddled with misinformation about the EthereumMax project,” the spokesperson wrote in an email to Rolling Stone. “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.”
The trouble appears to have started less than two weeks after EMAX launched on May 14. Pierce, who had just been fired from his job as an ESPN analyst after posting a stripper-filled video on his Instagram, publicly positioned EMAX as his savior during a tumultuous time. “I don’t need you. I got @ethereum_max,” he tweeted on May 26, adding that he had been “set free” by becoming his own boss. “I made more money with this crypto in the past month then I did with y’all in a year.”
The same day, EMAX announced that it was the “exclusive cryptocurrency” for buying tickets to the then-upcoming boxing match between Floyd Mayweather and Logan Paul — a pay-per-view event scheduled for June 6. In a press release, the company provided a link to a fight website that listed a variety of perks for buying tickets with EMAX. People who coughed up more than $5,000 in a single order were promised “authentic, signed Floyd Mayweather boxing gloves,” according to the legal complaint, which also notes that the site offered EMAX users a 10 percent discount at checkout, as well as exclusive access to two front-row, ringside tickets — and the chance to win a lottery
to attend the “official Mayweather after-party.”
On May 26, the volume of EMAX tokens had nearly quintupled to about $44 million when compared to the previous day. Within another 24 hours, it almost hit $108 million. A couple days before the fight, on June 4th, Mayweather and members of his entourage wore EMAX t-shirts while attending a Bitcoin conference in Miami, the complaint alleges. During a panel, Mayweather said he believed “there’s gonna be another cryptocurrency just as large as Bitcoin some day,” although he didn’t explicitly mention EMAX at the time. He also wore a large EMAX patch on his shorts during the fight itself, the complaint notes.
Less than two weeks after the fight, Kim Kardashian allegedly posted an EMAX ad on her Instagram, where she boasts more than 250 million followers, as a story. “Are you guys into crypto???? This is not financial advice but sharing what my friends just told me about the Ethereum Max token,” it reads, according to a screenshot included in the complaint. “A few minutes ago Ethereum Mac burned 400 trillion tokens — literally 50% of their admin wallet giving back to the entire E-max community.” The hashtags “#DisruptHistory,” “#WTFEmax,” and “#Ad” can be seen above a swipe-up link. But, as Slate pointed out in an article titled “Celebrity Crypto Shilling Is a Moral Disaster,” the token “was only a month old, few had heard of it, and it wasn’t even obvious how [it] was supposed to work.”
In the fall, the chair of the U.K.’s Financial Conduct Authority (“FCA”), Charles Randall, called Kardashian’s post “the financial promotion with the single biggest audience reach in history,” the complaint claims, adding that he also called her post “fraudulent” and expressed a need for a “permanent and consistent solution to the problem of online fraud from paid-for advertising.”
While it’s unclear what EMAX paid Pierce, Mayweather, and Kardashian for their involvement — if anything — Mayweather said in a press conference that he earned $30 million from the branded patches on his shorts, which also came from deals with Fashion Nova, and CBD company Smiz.
At its all-time high, the EMAX token was valued at $0.000000863 — up 1,370 percent above its initial price of $0.00000005875. Shortly after Kardashian’s post, it crashed to its all-time low of $0.000000017. Then, the transaction volume “plummeted” to “less than a hundredth of its initial capital,” according to the class-action complaint.
While the exact number of buyers is not listed in the lawsuit, it alleges that the number is in the “hundreds.” The class is seeking “all actual, general, special, incidental, statutory, punitive, and consequential damages and restitution,” as well as a trial by jury.
Jan 12, 2022: This story has been updated to include comment from EthereumMax.