A class action lawsuit against Kim Kardashian and Floyd Mayweather Jr. over their promotion of the crypto token ethereummax has been dismissed. The judge stated that the law “expects investors to act reasonably before basing their bets on the zeitgeist.“
Crypto-currency lawsuit against Kim Kardashian dismissed
A federal judge on Wednesday rejected a proposed class action lawsuit against Ethereummax founders and celebrity backers of the crypto-currency project, including reality TV star Kim Kardashian, boxer Floyd Mayweather Jr. and former Boston Celtics star Paul Pierce.
In his decision, Judge Michael Fitzgerald of the U.S. District Court for the Central District of California acknowledged that the claims in the lawsuit raised legitimate concerns about “the ability of celebrities to easily persuade millions of unsophisticated followers to purchase snake oil with unprecedented ease and reach“. However, he explained:
While the law certainly places limits on these advertisers, it also expects investors to act reasonably before basing their bets on the spirit of the moment.
Kim Kardashian promoted Ethereummax and the EMAX crypto-currency token in an Instagram post in June 2021. The reality TV star reached a settlement with the U.S. Securities and Exchange Commission (SEC) in October for failing to report $250,000 in compensation for touting the crypto-currency token on her Instagram account. Floyd Mayweather Jr promoted the same crypto token at a boxing match and a major bitcoin conference in Miami in June 2021.
Attorney John Jasnoch told Michael Fitzgerald:
If the plaintiffs had known the true facts of the promoters’ financial interest in the tokens, and were paid to advertise the tokens, they would not have paid so much for the tokens.
Investors sued Ethereummax founders and celebrity developers of the crypto project in January after the EMAX crypto-currency lost 97 percent of its value. Michael Fitzgerald said in his ruling that he would allow the plaintiffs’ attorneys to refile their complaint after amending some of their claims under a number of laws cited in the original filing.
Michael Rhodes, an attorney for Kardashian, told CNBC:
We are pleased with the court’s reasoned decision in this case.