A class action lawsuit against Kim Kardashian and Floyd Mayweather Jr. over their promotion of crypto token ethereummax has been dismissed. The judge stated that the law “expects investors to act reasonably before basing their bets on the zeitgeist of the moment.”
Crypto Lawsuit Against Kim Kardashian Dismissed
A federal judge dismissed a proposed class action lawsuit on Wednesday against Ethereummax’s founders and the crypto project’s celebrity endorsers, including reality TV star Kim Kardashian, boxer Floyd Mayweather Jr., and former Boston Celtics star Paul Pierce.
In his ruling, Judge Michael Fitzgerald of the U.S. District Court for the Central District of California agreed that the lawsuit’s claims raised legitimate concerns about “celebrities’ ability to readily persuade millions of undiscerning followers to buy snake oil with unprecedented ease and reach.” However, he explained:
While the law certainly places limits on those advertisers, it also expects investors to act reasonably before basing their bets on the zeitgeist of the moment.
Kardashian promoted Ethereummax and the EMAX cryptocurrency token in an Instagram post in June 2021. The reality TV star settled with the U.S. Securities and Exchange Commission (SEC) in October for failing to disclose a $250,000 compensation for touting the crypto token on her Instagram account. Mayweather Jr. promoted the same crypto token at a boxing match and a large Miami bitcoin conference in June 2021.
Attorney John Jasnoch told Fitzgerald:
If plaintiffs had known the true facts related to the promoters’ financial interest in the tokens, and that they were being paid to shill these tokens, they wouldn’t have paid as much for the tokens as they did.
Investors sued Ethereummax’s founders and the crypto project’s celebrity promoters in January after the EMAX cryptocurrency lost 97% of its value. Fitzgerald said in his ruling that he would allow the plaintiffs’ lawyers to refile their suit after amending some of their claims under a number of the statutes cited in the original filing.
Michael Rhodes, a lawyer for Kardashian, told CNBC:
We’re pleased with the court’s well-reasoned decision on the case.
What do you think about the judge dismissing the lawsuit against Kim Kardashian and other celebrities over their promotion of a crypto token? Let us know in the comments section below.