EthereumMax: Judge Drops Crypto Lawsuit Against Kim Kardashian and Floyd Mayweather | US News
A lawsuit accusing Kim Kardashian and Floyd Mayweather of misleading investors by promoting a cryptocurrency on social media has been dismissed.
Investors who bought EthereumMax tokens said they lost money after believing what the celebrities were saying about the digital asset.
The lawsuit was filed in January and claimed the defendants conspired to increase the value of the tokens.
District Judge Michael Fitzgerald of California said in his ruling Wednesday that the case raises “valid concerns” about celebrities’ ability to persuade fans to “buy snake oil with unprecedented ease and reach.”
But the law still expects investors to “act sensibly” before “following the zeitgeist of the moment,” he added.
Kardashian wrote an Instagram post in June 2021, saying, “Are you on crypto???
Her post contained “#ad” at the bottom, indicating she was sponsored, but her payment of $250,000 from EthereumMax was not disclosed.
Mayweather promoted the EMAX tokens at a boxing match and Bitcoin conference in June 2021.
The value of EMAX tokens skyrocketed in 2021 – but by January they had lost 97% of their value.
Defendants in the case included Kardashian, Mayweather and former Boston Celtics star Paul Pierce, Steve Gentile and Giovanni Perone, the co-founders of EthereumMax, and Justin French, a cryptocurrency consultant and developer.
The judge’s decision read: “This action demonstrates that almost anyone with the technical skills and/or connections can mint a new currency and create their own digital market overnight.
“Likewise, the promotion underscores the power of social media, allowing celebrities to communicate directly with their millions of fans at the touch of a button.
“These two facts combined appear to have led to unverified and highly volatile investment ventures going viral solely based on the paid words of prominent promoters.
“Losses have inevitably followed. The court acknowledges that this action raises legitimate concerns about the ability of celebrities to persuade millions of undemanding followers to buy snake oil with unprecedented ease and reach.
“But while the law certainly puts limits on these advertisers, it also expects investors to exercise common sense before basing their bets on the zeitgeist of the moment.”
Michael Rhodes, an attorney for Kardashian, told NBC, “We are pleased with the court’s well-founded decision in this case.”
Investors can refile the lawsuit if they change some of their claims by Dec. 22.
It comes two months after Kardashian agreed to pay $1.26 million (£1 million) and not promote cryptocurrency for three years to address claims by the U.S. Securities and Exchange Commission over her failure to pay the payment received from $250,000 to disclose, settle.