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A class action lawsuit against Kim Kardashian and Floyd Mayweather Jr. for their promotion of the crypto token ethereummax has been dismissed. The judge said the law “expects investors to act reasonably before basing their bets on the zeitgeist.”
Crypto lawsuit against Kim Kardashian dismissed
A federal judge on Wednesday dismissed a proposed class action lawsuit against the founders of Ethereummax and celebrities supporting the crypto 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 agreed that the lawsuit’s allegations raise legitimate concerns about “the ability of celebrities to easily persuade millions of indiscriminate followers to buy 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 zeitgeist.
Kardashian promoted Ethereummax and the EMAX cryptocurrency token in an Instagram post in June 2021. The reality TV star settled with the United States Securities and Exchange Commission (SEC) in October for having failed to disclose $250,000 compensation for touting the crypto token on his Instagram account. Mayweather Jr. promoted the same crypto token at a boxing match and major Bitcoin conference in Miami 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 sell those tokens, they would not have paid as much for the tokens as they did.
Investors sued Ethereummax founders and famous crypto project promoters in January after the EMAX cryptocurrency lost 97% of its value. Fitzgerald said in his ruling that he would allow the plaintiffs’ attorneys to refile their lawsuit after amending some of their claims under a number of statutes cited in the original filing.
Michael Rhodes, a Kardashian attorney, told CNBC:
We are satisfied with the well-reasoned decision of the court in this case.
What do you think of the judge who dismissed the lawsuit against Kim Kardashian and other celebrities for their promotion of a crypto token? Let us know in the comments section below.
Kevin Helms
Image credits: Shutterstock, Pixabay, Wiki Commons
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