- Kim Kardashian, Floyd Mayweather, and Paul Pierce have publicly supported the Ethereum Max token.
- Launched one month ago, the token has been purchased by over 100,000 individuals.
- Some have warned against purchasing the token, claiming there isn’t enough information about it.
Kim Kardashian promoted the Ethereum Max cryptocurrency token, but an expert says there are some red flags to watch out for before investing.
On Sunday, the mega-celebrity notified her 228 million followers of a “big announcement,” and then revealed that her “friends” had told her all about the “Ethereum Max token.” The post linked directly to a website for the crypto token.
The ad wasn’t Kardashian’s typical fare, which usually includes posts about her retail businesses, her family, and fashion. Ethereum Max also isn’t an obvious partner for one of the biggest influencers in the world — it’s not a token that’s readily available for purchase on cryptocurrency exchanges like Coinbase or Robinhood.
But Kardashian wasn’t the only celebrity to promote the token, which is barely a month old.
Last week, boxer Floyd Mayweather sported a t-shirt and belt featuring the Ethereum Max website at his fight event with YouTuber Logan Paul, and viewers were told they could purchase virtual access to the event with the coin.
Paul Pierce, a retired professional basketball player, wore a giant logo of the coin to the Mayweather fight.
The wave of celebrity promotion appeared to work for the token. On May 29, Ethereum Max sold $118 million worth of tokens according to Coin Market Cap. On June 13, a smaller bump of $24 million was sold, up from $9 the day before. Starting with over two quadrillion tokens released since launching on May 15, Ethereum Max now has over 100,000 holders, according to a press release about the coin.
For many, though, the token and what’s behind it remain a mystery beyond the names attached to it. Some experts warn Ethereum Max and tokens like it could be risky investments.
Ethereum Max uses the same blockchain as Ethereum but is not the same thing as the popular cryptocurrency
Ethereum Max is an ERC-20 token, which means that it uses the Blockchain ledger of the popular Ethereum cryptocurrency to record sales and transactions, but doesn’t actually have any relation to the Ethereum token or it’s founders. Ethereum was founded in 2015 as an open-ended software platform that allows users to trade or create their own currency tokens, known as altcoins.
Like many of the new altcoins that have popped up after the popularity of Dogecoin and SafeMoon, Ethereum Max’s value is carried by the hype of its investors and promoters.
As more people become aware of the tokens, and more people invest, the price continues to rise. When they stop buying or start selling, the coin plummets in value. Older coins like Bitcoin and Ether have some track record of practicality, proving they can be spent and held as investments. Newer coins lack that background or practical application, making them a riskier investment.
According to Scott Melker, the host of the Wolf of All Streets podcast and a crypto trader, there are red flags to watch out for with Ethereum Max.
“Speculation is what drives most of these coins in value,” he said.
Of note, Melker said, is that there’s still no white paper for the token. White papers provide more details about tokens and plans for their future as a measure of transparency for investors, and are commonly released by cryptocurrency and token creators. On the token’s
, the creators say that “the white paper is currently still being worked on and is hopefully going to be released to the public within the next few weeks if noting (sic) goes wrong.”
“There’s very little information about it online,” Melker said. “The utility is unclear.”
The origins of Ethereum Max are not public and those working on the project haven’t shared much detail
Josh James, an outside consultant on the project who was first contacted by the founders on June 3, told Insider that the Ethereum Max team has more than two dozen people, but that they don’t want to reveal themselves due to either NDAs or a fear of harassment.
James said he believes that before his involvement, the token’s team used “pump and dump marketing,” which is an attempt to increase a stock or token’s worth through “fake recommendations,” according to Investopedia.
“The original handful of founders launched something they didn’t understand, using hired work, and it ran away from them,” James said.
Publicly, there are two other people who have tied themselves to Ethereum Max. Giovanni Perone “leads operations and business development” and Steve Gentile “leads community engagement and brand strategy.”
“As we began to gain momentum, well-known individuals started to approach us to get involved with the eMax movement,” Gentile told Insider.
Those that invest in Ethereum Max are exposing themselves to the risk of losing their investment
Though major celebrities have backed Ethereum Max and other upstart tokens like SafeMoon, some experts are skeptical.
Lark Davis, a crypto investor and YouTuber with over 390,000 subscribers, called Ethereum Max a “Ponzi scheme” on Twitter, which is a common sentiment around meme tokens that rely on heavy promotion from influencers.
—Lark Davis (@TheCryptoLark) June 14, 2021
“I do think we will see a lot more celebrity endorsements of certain coins, but I don’t think that will define the crypto movement,” Melker said. “The crypto community pushes back hard against these types of promotions.”
The risks of having money stolen and the token dissipated are also real with altcoins.
Trading of newly formed cryptocurrencies is mostly unregulated by the US government. In December 2020, the Financial Crimes Enforcement Network proposed that virtual currency should be regulated like traditional currency.
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