Floyd Mayweather Jr. is the subject of a class action lawsuit alleging that he and other celebrities played a role in a cryptocurrency scam that deceived investors.
The suit, which was filed on Jan 7. in the U.S. District Court for the Central District Court of California, contends that the Hall of Fame boxer, influencer Kim Kardashian, and former NBA forward Paul Pierce participated in a “pump-and-dump” scheme whereby they persuaded their fans to buy tokens of EthereumMax. This inducement, the suit argues, artificially boosted the price of the cryptocurrency, allowing Mayweather, et al. to sell their interest for a profit and leaving their followers to hold the bag.
“Defendants’ strategy was a success. The misleading promotions and celebrity endorsements were able to artificially increase the interest in and price of the EMAX Tokens…causing investors to purchase these losing investments at inflated prices,” reads the suit, which also named several EthereumMax executives.
The suit was filed by a New York City resident and is seeking to represent anyone who purchased EthereumMax tokens from May 14 to June 27, 2021. The existence of the suit was reported Tuesday by The Wall Street Journal.
Mayweather repeatedly shilled for EthereumMax in the period leading up to his June 6 exhibition bout with Logan Paul in Miami Gardens, Florida, last year, according to the suit.
On May 26, 2021, EthereumMax announced in a press release that it was the only form of cryptocurrency accepted for online ticket buyers of Mayweather-Paul. The website promised ticket buyers signed Mayweather gloves and a chance to participate in a lottery to attend Mayweather’s official after party.
Two days before the Paul fight, Mayweather and his entourage made an appearance at a conference in Miami devoted to Bitcoin, the most recognized cryptocurrency in the world, wearing EthereumMax t-shirts. Mayweather proceeded to minimize the presence of Bitcoin. In one instance of his talk, Mayweather said “there’s gonna be another cryptocurrency just as large as Bitcoin some day,” without mentioning EthereumMax. Mayweather’s comment reportedly elicited loud boos from the partisan audience.
Mayweather, 44, also promoted EthereumMax on the boxing trunks he wore on the night of his fight with Paul.
This is not the first time Mayweather has run into problems in the blockchain world.
In 2018, Mayweather and music producer DJ Khaled were charged with failing to disclose that they were paid to promote a cryptocurrency investment in an initial coin offering – the bitcoin equivalent of an IPO – thus giving the appearance that they were unbiased to potential investors. The Security Exchange Commission ascertained that Mayweather was paid approximately $300,000 for promoting three ICOs across his social media. In one Twitter post, Mayweather wrote, “You can call me Floyd Crypto Mayweather from now on.”
Later that year, Mayweather reached a settlement with the SEC, forking over $614,775 in penalties. He was also slapped with a three-year ban from promoting securities. According to the Jan. 7 suit, Mayweather is technically in breach of this resolution: “The settlement was dated November 29, 2018, meaning that this agreement was blatantly violated in connection with Defendants Mayweather’s EthereumMax promotion.”
Mayweather recently announced he will return to the ring in an exhibition bout scheduled for Feb. 20 in Dubai. An opponent has not yet been named.