Friday, September 30

US celebrities sued for cryptocurrency fraud | Level Up

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At the height of the promotional boom of cryptocurrencies, perhaps there are some who think that their investment and bet is safe if they are promoted by celebrities, after all they would not lend themselves to do some fraud, right? The reality is that this is not the case, and in most cases celebrities do not directly attend to their businesses, they only lend their image in case their staff consider that there is an opportunity to earn money with minimal problems. However, the volatility of cryptocurrencies has already generated a scandal in the socialite of the United States after the crash of EthereumMax,

Beware of investments in cryptocurrencies!

According to information from CNET, a group of investors filed a lawsuit against celebrities such as Kim Kardashian, boxing champion Floyd Mayweather and retired Boston Celtics star Paul Pierce, pointing to them as participants in a fraud under the “pump and dump” scheme, considered as a fraudulent action within the legal framework of the stock market.

According to the information, the investment group accused these celebrities of promoting EthereumMax, a cryptocurrency that developed in the market between May and June 2021 and caused losses. The above considering that celebrities agreed to promote the cryptocurrency in various events and on social networks, which caused its value to go from $ 0.00000006 USD to increase more than 1000% in a few days.

In the case of Kim Kardashian, the socialite promoted EthereumMax on her social networks and it is estimated that 19% of her followers invested in the cryptocurrency. For his part, Floyd Mayweather did the same by promoting it in the run-up to his fight against Logan Paul, while NBA star Paul Pierce supported investment in cryptocurrency through his social networks.

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Floyd Mayweather promoting EthereumMax – Image: Forbes

EthereumMax lasted at the top for just a few days despite celebrity support

As expected, the promotion that these famous people made of EthereumMax caused its value to increase, however, after a few days the campaign ended and its price collapsed, falling even below its original value.

What happened not only represented losses for those who could not sell EthereumMax while it was up, but it was considered suspicious enough to point out the fact as a “pump and dump” operation, which is characterized by artificially inflating the value of a share , in this case a cryptocurrency, knowing in advance that it will collapse in a short time giving opportunity to those who organize this scheme to buy low and sell high.

Thus, although the fever for cryptocurrencies and NFTs is at one of its highest points, it is worth thoroughly reviewing the investment made and having full knowledge of what is done because the verifications on the Internet and social networks, as well as the support of famous people, they mean nothing.

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