US judge revives crypto lawsuit against Kardashian and Mayweather
Kim Kardashian and Floyd Mayweather will find themselves in court, facing allegations of unlawful marketing of the now-defunct cryptocurrency token EthereumMax (EMAX).
After dismissing the case last year, US District Judge Michael Fitzgerald reinstated the complaint, granting the plaintiffs a second chance to pursue legal action against the high-profile celebrities.
In January 2022, a class action lawsuit was filed against the two celebrities, accusing them of promoting a pump-and-dump scam in December 2022. While the California federal court dismissed some claims, the accusations of “unfair competition” against Kardashian and Mayweather for endorsing the EMAX token in 2021 were not dismissed by Judge Michael Fitzgerald in a recent order issued on June 6.
Kardashian promoted the EMAX token on Instagram in June 2021, while Mayweather sported the EMAX logo on his boxing trunks during his match with YouTube host Logan Paul.
In October 2022, Kardashian faced charges from the SEC for unlawfully promoting crypto security and settled the case for $1.26 million related to her involvement in advertising EMAX.
The court deemed it necessary to revise the extensive 162-page lawsuit, which asserted that Kardashian, Mayweather, and NBA player Paul Pierce were profiting from endorsements at the expense of their fans, promoting an investment opportunity lacking a legitimate business plan.
Judge Fitzgerald argued that it was essentially a new complaint, given the involvement of different defendants and the allegations being presented.
The judge further stated that promoting a cryptocurrency token without disclosing compensation is an evil and unfair practice, highlighting that the famous defendants failed to provide compelling arguments in their favor.
However, he cautioned that Scott+Scott, the class action attorneys, would need to substantiate the impact of the celebrities’ endorsements on the token’s pricing. According to Sean Masson of Scott+Scott, the foundation of the EMAX business strategy relied on deceptive celebrity endorsements.
Token buyers who believed in the authenticity of the celebrity endorsements are seeking unspecified damages in the class action lawsuit.