Kim Kardashian and Other Celebrities Beat Crypto Investor Lawsuit

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Reuters —

A California federal judge on Wednesday dismissed a lawsuit against reality TV star Kim Kardashian, boxing legend Floyd Mayweather Jr. and others for their role in promoting a cryptocurrency, saying that it was unclear whether the investors who sued actually saw the promotions.

The lawsuit filed in January claims EthereumMax executives conspired with celebrity promoters to trick investors into buying the EMax token, driving up its price and allowing them to sell their own tokens for a profit.

U.S. District Judge Michael Fitzgerald in Los Angeles said the investors could modify and refile their proposed class action lawsuit.

The decision comes as other celebrity promoters face legal action from users of failed cryptocurrency exchange FTX, whose collapse has deepened an ongoing crypto winter.

Sean Masson, an attorney representing the investors in the EthereumMax case, said they plan to revise their claims to add a host of additional facts demonstrating wrongdoing and defendants’ liability.

Michael Rhodes, Kardashian’s lead attorney, said the defense was pleased with the courts’ well-reasoned decision.

Mayweather’s attorneys did not immediately respond to a request for comment. Former National Basketball Association star Paul Pierce was also named in the lawsuit.

Kardashian promoted EthereumMax in a June 2021 Instagram post, and Mayweather wore the company’s logo on his boxing trunks in a widely watched fight, investors said.

In Wednesday’s ruling, Fitzgerald said investors failed to show that executives and promoters were conspiring to mislead investors, rather than acting in their own best interests.

The investors’ fraud allegations failed because they did not indicate whether or when they saw the promotions, the judge wrote.

While investors may review these claims, Fitzgerald has definitively dismissed their claim under California consumer protection law, which he says applies to tangible goods and services, not intangibles such as crypto. -change.

Kardashian agreed in October to pay the SEC $1.26 million to settle claims that she did not disclose she had been paid to promote EthereumMax tokens. She did not admit any wrongdoing.

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