Follow media influencers at your own risk. There's a dark side to those smiling faces recommending you buy the product they're shilling.
Who hasn't heard of Kim Kardashian? Or Floyd Mayweather one of the greatest boxers' pound-for-pound in history?
The Kardashian brand is well-known, and I presume somewhat trusted. That trust was violated, however.
She's being sued over allegations that she misled investors when promoting a little-known cryptocurrency called EthereumMax.
A class action lawsuit filed last week in the U.S. District Court for the Central District of California accuses EthereumMax and its celebrity promoters of working together to artificially inflate the price of the token by making "false or misleading statements" in social media posts.
Boxer Floyd Mayweather was another EthereumMax shill. He endorsed the token in his boxing match with YouTube star Logan Paul. EthereumMax was accepted as payments for tickets to the event, a move that the lawsuit against him claims boosted trading volumes sharply.
Investors call this kind of con a "pump and dump" scheme where scammers attempt to boost the price of an asset through false and misleading statements.
And get this.
It's not the first time these two celebrities have been in hot water for cryptocurrency endorsements.
Mayweather was charged by the U.S. Securities and Exchange Commision with pumping an initial coin offering, a controversial crypto crowdfunding method in 2018.
He had to pay $600,000 in a settlement with the SEC but got away from admitting or denying the regulator's findings.
In September 2021, Charles Randell, chair of the U.K.'s Financial Conduct Authority, singled out Kim Kardashian's Instagram ad for EthereumMax in a speech warning of crypto scams.
If you take away anything from what you just read let it be exercising caution when listening to social media influencers.
There's a dark side to some of them many people aren't aware of.
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