A “pump and dump” situation hit EMAX after Kim Kardashian had agreed to pay $1.26 million in settlement with the U.S. Securities and Exchange Commission (SEC) for unlawfully promoting the token.
From Monday to early Tuesday, the token saw a 124 percent spike in value, reaching its high of $0.000000009788 per unit. The token’s value soon fell by 47 percent after people began selling their EMAX.
Yesterday, the token trades totaled $97,847, with most investors trading their EMAX tokens with wrapped Ethereum (wETH) on Uniswap V2. The tokens reportedly also reserved volumes on two exchange platforms, Hotbit and Bitforex.
SEC chief Gary Gensler said Kardashian was charged for not disclosing that she had received money to promote EMAX on her Instagram account last year. In addition to paying the fine, the reality TV star also agreed not to endorse any crypto asset to her millions of social media followers for three years.
Gensler said the case should encourage investors to practice caution when a celebrity or influencer promotes a crypto product. He said investment products are not one size fits all.
Kardashian’s lawyer, Duncan Levin, said that the socialite was cooperative with the investigation. Levin added that his client wanted to avoid “a protracted dispute” and thus agreed to settle the charges. He also said that the SEC wanted to make his client’s case an example to others.
“The SEC is interested in sending a message to other potential celebrity endorsers of securities, to make sure their posts are not misconstrued as financial advice,” Levin said.
EMAX investors sue endorsers
Kardashian is not the only celebrity to have promoted EMAX. Floyd Mayweather and Paul Pierce also signed endorsement deals from the token issuer. In 2018, Mayweather was fined by the SEC for unlawfully promoting an initial coin offering (ICO).
.@espn I don’t need you. I got @ethereum_max I made more money with this crypto in the past month then I did with y’all in a year. TRUTH shall set u Free 🤪🤪 my own Bosshttps://t.co/3irnuWYve3 check it out for yourself
— Paul Pierce (@paulpierce34) May 26, 2021
These three public figures also faced a class-action lawsuit for allegedly misleading “consumers who invested in ethereummax (EMAX) cryptocurrency” tokens during a “pump and dump” scheme that lasted for around a month.
Kardashian’s legal representative moved to dismiss the suit last August because the original court filing did not mention that the plaintiffs had seen her Instagram post. Mayweather also pleaded to dismiss the case last week, claiming that the investors were looking for a “deep pocket.”
EthereumMax executives Giovanni Perone and Steve Gentile also faced a lawsuit for using celebrities to increase their social media presence so that investors would trust the company.
EthereumMax launched its network to the public in 2021, calling it “a robust and scalable ecosystem that fully maximizes the power of DeFi.” The total supply of EMAX is two quadrillion coins, but EthereumMax does not reveal the number of circulating coins. According to its white paper, the network implements a burning system, decreasing its supply in certain intervals by six percent.
There had been more than 480,000 EMAX transactions recorded by Wednesday, with about 110,000 unique addresses holding the assets. EMAX reached its all-time high value on May 31, 2021, trading at $0.000000597636 per unit. This year, EMAX has lost 99.1 percent of that peak value. Per Monday, the total market capitalization of EMAX was around $8.7 million.