The ongoing crypto crash and the ensuing panic are leaving no one unscathed, including popular athletes and celebrities like Floyd "Money" Mayweather Jr and Kim Kardashian.
Musk, Mayweather, Kardashian To Face Lawsuits
Class-action lawsuits are well underway against actress and model Kim Kardashian, boxer Floyd "Money" Mayweather Jr, and basketball player Paul Pierce for their involvement in advertising EthereumMax, a cryptocurrency alleged as a "pump and dump" scheme.
According to the lawsuit, the celebrities deceived their own followers into joining the EthereumMax community. The litigants added that the celebrities' questions "touted the prospects of the company and the ability for investors to make significant returns due to the favorable 'tokenomics' of the EMAX Tokens."
On the other hand, Elon Musk, Tesla, and SpaceX have also recently been charged with a $258 billion lawsuit claiming that Musk and his firms have "engaged in a crypto pyramid scheme by way of dogecoin cryptocurrency."
The lawsuit demanded an $86 billion payment from Musk for damages and that he stop promoting dogecoin.
Crypto Meltdown May Attract Stricter Regulation, Lawsuits in the US
A flurry of bad events had been happening within the crypto market in the past few weeks. Celsius, a cryptocurrency lending firm, is threatened by the risk of insolvency. Just this week, the company has decided to halt user fund withdrawals, swaps, and transfers.
Anonymous sources also told news agencies that they are not likely to provide bail-out funds to Celsius if it collapses.
Three Arrows Capital, a crypto hedge fund, was found to be at risk of imminent liquidation, putting into further danger their million-dollar market positions.
Vitalik Buterin, Ethereum co-founder, also shared his opinion recently that he does not believe traditional finance could be replaced by cryptocurrency.
"I do not expect cryptocurrencies to take over the world," Vitalik said.
According to a report from the US Federal Trade Commission (FTC), 46,000 people have already lost around $1 billion from cryptocurrency scams.
"There's no bank or other centralized authority to flag suspicious transactions and attempt to stop fraud before it happens," the FTC notes in its report.
What is the Cause of the Current Crypto Crash?
As of this writing, the global crypto market capitalization is now sitting only at $850 billion. Fear and Greed Index also reflects "extreme fear" within the market. Despite these pieces of information, the crypto community remains divided on whether a market collapse is imminent.
Recent figures show that Bitcoin ($BTC) has plummeted to a new low for this year, now changing hands within the $18,000-$21,000 level this Saturday, June 18. This price action followed the Federal Reserve's action to increase interest rates by 0.75% in order to combat runaway inflation.
According to Mostafa Al-Mashita, the executive vice president of SDM, a cryptocurrency firm in Canada, there are multiple factors causing the wild downward plunge of the crypto space.
"What we are experiencing is the impact of a worsening macroeconomic trend in which inflation is rising because of supply-chain issues," said Mostafa.
