• Kim Kardashian and Floyd Mayweather are accused of fraudulently raising the price of the cryptocurrency EthereumMax in a class action complaint.
• The celebrities made "false or misleading comments" about the little-known token in social media posts, the lawsuit claims.
• Since early June, EthereumMax has lost about 97 percent of its value, prompting some investors to term it a "pump and dump" scheme.

Kim Kardashian and Floyd Mayweather are being sued for allegedly misleading investors after they promoted EthereumMax, a little-known cryptocurrency, to their millions of social media followers.

EthereumMax and its celebrity promoters are accused of conspiring to artificially inflate the price of the token by making "false or misleading statements" in social media posts, according to a class action lawsuit filed last Friday in the United States District Court for the Central District of California.

Last year, Kardashian created a stir with an Instagram post endorsing the EthereumMax token. "Are you guys interested in crypto?" Kardashian penned an essay. "This is not financial advice; instead, I'm relaying what my Ethereum Max token buddies just informed me!"

Kardashian's post includes the hashtag #ad, implying that she was paid to promote it. It's unclear how much Kardashian was paid by EthereumMax, although her cost per sponsored Instagram post has been estimated to be in the $500,000 to $1 million range.

Meanwhile, in his boxing battle with YouTube personality Logan Paul, Mayweather backed the token. The lawsuit says that accepting EthereumMax as payment for event tickets increased trading volumes dramatically.

Mayweather also spoke about EthereumMax at a large bitcoin conference in Miami, where he was booed off the stage. According to the lawsuit, Mayweather does not appear to have received any compensation for his marketing of the token.

The lawsuit argues that the celebrities' actions caused losses to plaintiff Ryan Huegerich, a New York resident, and other investors who purchased EthereumMax tokens between May 14, 2021, and June 17, 2021.

Since early June, EthereumMax has lost about 97 percent of its value, prompting some investors to term it a "pump and dump" operation, in which scammers try to inflate the price of an asset by making false or misleading assertions. In Huegerich's lawsuit, Kardashian and Mayweather are accused of "shilling" EthereumMax.

EthereumMax "has no link" to ether, the second-largest cryptocurrency, the lawsuit said, adding its branding appears to be an attempt to deceive investors into thinking the token is a part of the Ethereum network.

When Bloomberg called Kardashian and Mayweather's representatives, they were not immediately available. On Twitter, EthereumMax did not respond to a request for comment.

It's not the first time celebrities have been chastised for endorsing cryptocurrency, much to the chagrin of regulators.

Mayweather was charged by the US government in 2018. Securities and Exchange Commission (SEC) has charged Securities and Exchange Commission (SEC) with pushing an initial coin offering (ICO), a contentious cryptocurrency crowdfunding mechanism. Mayweather agreed to pay the SEC more than $600,000 in a settlement without admitting or rejecting the regulator's allegations.

In a speech warning against crypto frauds in September 2021, Charles Randell, chair of the United Kingdom's Financial Conduct Authority, pointed up Kardashian's Instagram ad for EthereumMax. While Randell couldn't determine if EthereumMax was a scam, he did note that "scammers often pay social media influencers to assist them pump and dump new currencies on the back of sheer speculation."