Description
In January 2022, in a class-action lawsuit filed against the cryptocurrency company EthereumMax that alleged the company is a pump and dump scheme, Pierce was named as a defendant along with media personality Kim Kardashian, former professional boxer Floyd Mayweather Jr., and other celebrities for promoting the EthereumMax token on their social media accounts. In February 2022, the U.S. 11th Circuit Court of Appeals ruled in a lawsuit against Bitconnect that the Securities Act of 1933 extends to targeted solicitation using social media.
Though the name begins with Ethereum, it’s not related to the second-largest cryptocurrency by market cap, but a token built on top of the blockchain. Like many cryptocurrencies, it promises to reshape the future of finance in hyperbolic terms. It screams that vision to the world with flashy ads and sidewalk spray paint stencils that implore readers to buy in. Any investor who read the EthereumMax project’s grand plans for inking deals that “drive value” into EMAX or heard its promoters predicting price pumps would have the “reasonable expectation” of making money, the Securities and Exchange Commission (SEC) said. In other words, EMAX is a security. While the SEC doesn’t have a mandate for crypto, its top brass believes the vast majority of digital assets are securities they can regulate like stocks or bonds. Getting branded as one by the SEC dramatically escalates what’s required of a crypto project and its promoters, but relatively few have faced SEC action.
