In June 2021, at the height of the cryptocurrency craze, Kim Kardashian posted an Instagram story promoting Ethereum Max, a brand-new token. The reality TV star wasn’t giving “financial advice,” but she was eager to share with her 225 million followers “what [her] friends just told her about the Ethereum Max token” – namely that they were reducing supply to give “back to the entire E-Max community.”
Turns out some of those “friends” had paid the professional celebrity $250,000 to promote Ethereum Max, and even though Kardashian had labeled her Instagram post as an “ad” it wasn’t enough to satisfy regulators. Last month the Feds fined her $1.3 million for hyping the cryptocurrency. SEC Chair Gary Gensler described the charges as “a reminder to celebrities” that they must disclose such payments. Kardashian declined to comment.
Kardashian was not the only famous personality to endorse the obscure token, which sported a market cap of nearly $250 million in May 2021 but is currently virtually worthless. Other paid Emax boosters included boxing legend Floyd Mayweather, NBA Hall of Famer Paul Pierce, and NFL wide receiver Antonio Brown.
But the token’s famous promoters were merely the outward manifestation of more widespread disease. An exclusive Forbes investigation has uncovered that behind Emax’s rapid rise–and even faster fall–are two guys from the small coastal city of Milford, Connecticut: Russ Davis, a crypto promoter and marketer, and Justin Maher, one of Emax’s cofounders and Davis’ brother-in-law. Over the last 18 months, Davis and Maher have shilled dozens of dubious tokens.
Many of those tokens are so small and obscure that there is little available data, but Forbes was able to find historical prices for 18 of the cryptocurrencies endorsed by Davis and Maher. On average, each token is down more than 90% from its all-time high. That compares to the broader cryptocurrency market which is down 70% since peaking last November, according to CoinMarketCap. At least eight coins promoted by Davis and Maher (with names like Rocket Bunny and Boom Baby) have plunged over 99% from their peaks. Davis and Maher’s role behind Emax has not previously been reported.
In an apparent web3 twist on the classic “pump n dump,” Davis and Maher pitched Emax as a long-term investment to Davis’ thousands of Twitter, Instagram and Facebook followers during the token’s launch last May, while simultaneously cashing out their own holdings through secret wallets. According to allegations in a class action lawsuit and individuals who spoke with Forbes, the duo pocketed millions of dollars in profits.
Davis, 41, runs InRussWeTrust, a paid newsletter and private Facebook group of 24,000 crypto enthusiasts. Maher, 37, is a crypto promoter and was a financial advisor at Northwestern
For his part, Davis denies the lawsuit’s allegations and said he’s never participated in any pump and dump schemes. Davis alleges that Giovanni Perone, one of Emax’s cofounders and a defendant in the class action lawsuit, was the one doing the pumping and dumping: “Gio was the kingpin of the whole Emax scandal, 100%.”
In a series of text messages with Forbes Maher also blamed “Perone and his crew.” Maher insists that most of the lawsuit’s claims are “based on hearsay or conjecture, or just straight up conspiracy theories.”
Perone, 38, was an executive at private equity shop Cerberus Capital Management before cofounding Emax. Perone, like Davis and Maher, offloaded Emax tokens “onto unsuspecting investors” for “substantial profits” during the token’s fist six weeks, according to allegations in the lawsuit. Perone and his lawyers did not respond to repeated requests for comment.
Not everyone is mad at Davis and Maher. Some Emax investors sold early and scored profits. Others made peace with their losses, chalking it up to the realities of the crypto market where fortunes can vanish as quickly as they’re made.
To the less forgiving though, InRussWeTrust sabotaged its own followers.
“A lot of people followed Russ,” says Tony Russo, 34, a Florida-based crypto investor and former InRussWeTrust member. “He gained trust and then started screwing his own people over.”
Before becoming a crypto millionaire, Russ Davis hit the jackpot the old-fashioned way: By winning the lottery. In November 2016, Davis won the Connecticut state lottery’s $1 million Diamond prize; he took home $720,000 after-tax.
By the start of 2021, Davis was dabbling in crypto. That February, he began investing in Shiba Inu, the dog-meme token that Elon Musk would help hype to the moon, and helped a bunch of friends do the same. After Shiba Inu skyrocketed in the spring, Davis was crowned a “crypto consultant” by CNN and won thousands of loyal fans. He parlayed his burgeoning reputation into InRussWeTrust.
Davis’ followers first heard about Emax on May 14, 2021, two days after the cryptocurrency was created. Maher advised the Facebook group to not “sleep on” the new token and posted screenshots that showed Emax’s astonishing 24-hour gains of 466,590%. “Emax is crushing records,” Davis wrote the next day.
To generate these eye-popping “returns,” Emax’s creators, which included Maher, had underfunded Emax’s liquidity pool “to the point where small buys would cause large spikes to the price,” according to the class-action lawsuit, which was filed in January in the Central District of California U.S. District Court on behalf of around 100 plaintiffs who lost more than $5 million investing in Emax.
Emax’s creators had essentially created a penny stock bucket shop–of the sort made famous by the movie Boiler Room–for the crypto age, only one where the economics were far better. No need to open physical offices or hire an army of crooked salesmen to work the phones. Social media influencers and celebrities can amplify products faster. Lawyers, SEC filings and even the need for real businesses to back sketchy stocks, are rendered completely unnecessary. And best of all, few guardrails and scant enforcement.
The lawsuit names five “executive defendants,” all like Maher cofounders of Emax. They have filed an attempt to get the case dismissed. There are also five “promoter defendants”: Kim Kardashian, Paul Pierce, Antonio Brown, Floyd Mayweather, Jr., and Russ Davis. The point of the scheme, the complaint alleges, was to use, “the artificially inflated prices” to burnish Emax’s credentials to investors while the defendants cashed out.
Investors new to crypto could use the 18-step instructional video on how to buy Emax created by Michael Speer, whose wife owns a home in Milford, and is one of the executive defendants in the lawsuit. Speer, a one-time mayoral candidate in East Haven, Connecticut who now lives in Texas, misrepresented himself to the public as a neutral third-party when he was actually a cofounder of Emax, the lawsuit alleges. Speer denies playing any role in Emax’s founding, calls the lawsuit’s allegations against him “bogus” and says he’s never met Davis or Maher.
Josh Olin, 35, was one of those new investors. A former video game developer who worked on the Call of Duty franchise, Olin started investing in crypto early last year and found his way to InRussWeTrust. He initially splashed a few thousand dollars on Emax and is not a party to the class action lawsuit.
As Emax’s price alternately soared and plunged during its chaotic first weeks, Olin doubled down on his bet: “I just kept buying in and buying dips like they tell everybody.” Ultimately, Olin says he spent about $100,000 buying Emax tokens. “It was a lot, a lot, a lot of money.”
More experienced investors might have noticed some big red flags. For instance, Emax didn’t publish a white paper–a technical overview of the token and its goals–before listing, as is customary for new cryptocurrencies. Even weirder, Emax completed a “hard fork”–a technical term for migrating to a new blockchain and issuing new tokens to holders–less than two weeks after launching. Why would a brand-new cryptocurrency need–or want–such a fundamental overhaul so quickly?
But some investors found it easy to overlook technical matters when the token was endorsed by a raft of celebrities in its first few weeks. In addition to Kardashian and those named in the lawsuit, Emax was promoted by model and influencer Amber Rose, rapper French Montana, nightclub owner David Grutman, celebrity jeweler Eric Da Jeweler, and NFL wide receiver Juju Smith-Schuster. Even Tom Brady joined the action, commenting, “I’m in on that!!” on an Instagram post by Grutman announcing that two of his Miami nightclubs would start accepting Emax as a form of payment.
None were more influential, or better paid, than Floyd “Money” Mayweather Jr. who earned $2.5 million for pumping the coin, according to the lawsuit. The boxer, who had been fined $615,000 in 2018 for promoting a different cryptocurrency scheme (he did not admit or deny the findings), wore an Emax shirt to the Bitcoin Conference in Miami on June 4, 2021, where he was interviewed on Fox News and declared during a panel, “I believe there’s gonna be another cryptocurrency just as large as Bitcoin someday.” Emax also became the exclusive crypto payment option for Mayweather’s pay-per-view fight against YouTube star Logan Paul on June 6, 2021, a fact that Emax advertised on a billboard in Times Square.
Davis posted photos in his Facebook group of himself and Mayweather in Las Vegas on the day of the big fight, announcing a “long term deal” between Emax, Mayweather and InRussWeTrust. But Mayweather does not appear to have promoted Emax again after the fight. Mayweather could not be reached for comment.
Like any digital asset, Emax transactions are recorded on a public ledger, where anyone can track coin movements between digital wallets. To reassure the market that they weren’t dumping tokens, Davis and Maher had publicized the wallet addresses that they said held their Emax. Although the data seemed to corroborate what they were saying, Olin was suspicious. Trolling through the blockchain he soon discovered other wallets with large Emax holdings that were indeed cashing out.
“The further I investigated, the more inconsistent things would get,” Olin says. “I had a bunch of wallets that I knew were colluding. I had a bunch of accounts that I knew were all related to one another.”
By Olin’s estimation, dozens of wallets connected to Davis’ public wallet had sold “tens of millions of dollars” of Emax between May 2021 and August 2021. The Emax lawsuit tells a similar story, alleging Davis started cashing out his “massive” Emax holdings shortly after his promotional activities began. The complaint lists 46 wallet addresses that are “believed to be owned/controlled by Davis” and “used to conceal his transactions.”
Davis denies cashing out Emax holdings through secret wallets, and he disclaims ownership of all the wallets identified in the lawsuit. “The accusations of the pump and dump stuff are so humorous, it’s almost offensive,” he says.
Maher, meanwhile, as a cofounder of Emax received 5.9% of all tokens, according to the lawsuit. Maher departed the Emax founding team about two weeks after the project’s launch, his stake worth $4.1 million at the time, and then quickly sold off 98% his holdings, the lawsuit alleges. Maher says he “never received a penny as cofounder” and insists he didn’t sell anything until after the Mayweather fight.
Jay Falcone, a resident of Seymour, Connecticut, which is just 11 miles down the road from Milford, who is familiar with Emax’s origins and is a friend of Giovanni Perone, says that Davis bought his Emax stake “very, very early–like on day one–and for very little cost, and rather than coming on to the project to help, instead sold off the entire way.” Falcone, who is not a party to the lawsuit but lost “40 to 50 grand” on Emax, blames Davis for the token’s trajectory.
It wasn’t just Falcone: Emax got around Milford. The new “internet coin” was the subject of a 98-comment discussion thread in a popular local Facebook group. Michael Bulkley, a pastor at Milford’s Kingdom Life Christian Church, told Forbes he lost $4,500 investing in Emax after a parishioner told him about it. “Human nature and greed got the best of me,” Buckley says.
When, in July 2021, Olin confronted Davis and began sharing his suspicions with the InRussWeTrust community, Davis kicked him out of the Facebook group. Today, Emax trades at a 99.5% discount from its short-lived heights last May.
Stephania Roberts, a 38-year-old independent marketing consultant, first started investing in crypto in 2017. She joined InRussWeTrust shortly after its launch and was among Emax’s first investors, but unlike Olin, she sold her coins early, netting thousands of dollars in profit.
But not even Roberts stood a chance on the Matrix Samurai token, a scheme promoted by Davis last June, during the peak of the Emax craze.
Davis alerted his followers to Matrix Samurai in a Facebook post on June 2, 2021, identifying himself as a “founding Samurai.” Three days later, he touted Matrix Samurai again, posting its since-deleted white paper. Then, on June 12, the burglary went down.
“I was in Houston. The coin launched on a Saturday at like 10am, and by 10:15am all the money was gone,” recalls Roberts. “I had like $20,000 in this coin–everything was gone.”
In crypto, Matrix Samurai is what’s known as a “hard rug pull,” in which a token’s developer inserts a backdoor in a token’s code that enables them to drain investors’ money. It’s difficult to measure how much exactly investors lost from Matrix Samurai. But DexTools, a tracker of decentralized tokens, recorded buying volumes of $55 million on June 12. In a Facebook group of ex-Davis believers (“InRussWeDONTTrust”), one person said they lost $30,000; another, $15,000. Today, 8,130 wallets hold worthless Matrix Samurai tokens, according to Etherscan.
Davis denies any wrongdoing regarding Matrix Samurai. Immediately after the rug pull, he shared his public wallet on Facebook, which appears to show he lost several hundred thousand dollars on the token. “If I’m a pump and dumper, I’m the worst one in the world because all I’m doing is losing money,” Davis told Forbes. Maher also posted in the Facebook group to deny any wrongdoing and explain that he had slept through the launch while vacationing in Hawaii, and as a result, had not invested–or lost–any money.
Two days later, Maher pinned the blame on a rogue developer, but Roberts didn’t buy it. Like Olin she had begun tracking Emax’s blockchain, using the wallet tracking app Zerion. “I literally spent months tracking all these wallets,” she says. “Going from wallet to wallet, wallet to wallet. It was like a whole maze.”
When Roberts started raising her suspicions with InRussWeTrust’s members, Davis gave her the boot, too. “He blocked me out of the group and then he sent me a message,” she says. “But when I went to go read it, he had deleted it.”
Since Matrix Samurai’s collapse, Davis and Maher have kept busy cycling through new cryptocurrencies. For a while it was The People’s Coin, which Davis touted on Fox Business Network as “an honest coin [to] help out charities with cryptocurrency.” These days it’s Challenge Coin, a cryptocurrency that says it donates 4% of all transactions to nonprofits helping U.S. veterans. In June, Fox Business Network invited Davis back on to hype Challenge Coin alongside Rob O’Neill, the U.S. Navy Seal famous for his participation in the raid of Osama Bin Laden’s Pakistan compound (and now a Challenge Coin promoter).
“A cryptocurrency is just like any store of value,” explained Davis, when the Fox host, Maria Bartiromo, asked him where Challenge Coin derives its value from. “What’s a baseball card worth to you? If it’s valuable to you and people want to pay for it, then that’s what the value is.”
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