A federal judge in California has dismissed a lawsuit against several well-known celebrities, including Kim Kardashian and Floyd Mayweather. They were charged with promoting the cryptocurrency EthereumMax (EMAX).
Claimants can resubmit their claim
The lawsuit was first filed in January. The judge stated reportedly it was unclear whether the plaintiffs had seen the specific promotions shared by the celebrities. Judge Michael Fitzgerald also said investors should be expected to “act reasonably before basing their bets on the zeitgeist of the moment.”
Despite the dismissal, Judge Fitzgerald said the plaintiffs could re-trial with amended claims.
The plaintiffs’ lawyers argued that the high-profile celebrities colluded with the crypto project’s co-founders, Steve Gentile and Giovanni Perone, to inflate the price of the tokens. Subsequently, the investors would be left with losses after it fell again.
“Defendants praised the company’s prospects and ability for investors to earn significant returns from the favorable tokenomics of the EMAX tokens.” So argued the plaintiffs in a complaint filed in the U.S. District Court of the Central District of California. “In reality, the defendants marketed the EMAX tokens to investors so that they could sell their share of the float for a profit.”
Kim Kardashian has been running several EthereumMax promotions for the past two years posted on her Instagram where she has 318 million followers.
Kardashian’s Crypto Adventures
While the lawsuit has been dismissed, Kardashian did have to pay a $1.26 million fine to the Securities and Exchange Commission (SEC) in October for her promotions of EthereumMax.
The SEC accused the reality TV star of failing to reveal that she was paid $250,000 to promote the project on her Instagram. Gary Gensler concluded in a statement:
This case reminds us that when celebrities or influencers endorse investment opportunities, including crypto assets, it does not mean that those investment products are suitable for all investors. We encourage investors to consider the potential risks and opportunities of an investment in light of their own financial goals.