Kardashian Crypto Hype Lawsuit Advances Her Alleged Lies

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(Bloomberg) — Kim Kardashian has failed to persuade a judge to dismiss a lawsuit in which she is accused of defrauding investors in a cryptocurrency called EthereumMax by falsely promoting digital tokens.

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Floyd Mayweather Jr. fared better, with the judge finding that his public statements about the EMAX token’s growth prospects were mostly harmless.

But investors who claim to have paid inflated prices for blockchain-based digital assets will have the opportunity to revise and refile their claims that the former boxing champ didn’t disclose he was paid to promote. EMAX.

U.S. District Judge Michael Fitzgerald in Los Angeles on Tuesday dismissed arguments from Kardashians attorneys that he should dismiss false advertising claims on his social media posts in which she said EMAX tokens would be accepted at some retail outlets. night as payment for table reservations.

The judge said the investors correctly alleged that the posts were literally false. He also discovered that a Kardashian post suggesting EMAX tokens were in short supply was misleading.

Fitzgerald had dismissed the allegations in November, saying there were a lot of problems with the case. In Tuesday’s 84-page ruling, he noted that the investors’ lawyers had shrewdly addressed some shortcomings in their previous version of the complaint, but warned that he was giving them only one more opportunity to address the flaws. remaining shortcomings in some claims, otherwise they would be fired for good. .

In addition to targeting celebrity promoters, investors have sued several EMAX co-founders and consultants.

A Kardashian attorney did not immediately respond to a request for comment.

Mayweather cannot be prosecuted for declaring his belief on EMAX’s future growth at a Bitcoin conference in 2021 because that amounts to the epitome of the non-actionable puff, the judge said.

The story continues

The U.S. Securities and Exchange Commission announced in October that Kardashian had agreed to pay $1.26 million to settle allegations that she broke U.S. rules by touting EMAX tokens. The SEC said Kardashian did not disclose that she was paid $250,000 to post on her Instagram account about the tokens.

Kardashian settled without admitting or denying the SEC allegations. And she agreed to refrain from bragging about any additional digital assets for three years.

The law requires anyone who touts a security, such as a stock or even certain types of cryptocurrencies, not only to say that they are paid to do so, but also to disclose the amount, source and nature of those payments. .

The case is In Re EthereumMax Investor Litigation, 22-cv-00163, US District Court, Central District of California (Los Angeles).

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