Judge reinstates EMAX class action against Kim K and Mayweather.

Celebrity defendants Kim Kardashian and Floyd Mayweather are facing a class action lawsuit that claims they promoted the now-defunct cryptocurrency EthereumMax (EMAX) improperly. The lawsuit alleged that the pair promoted a “pump and dump” scheme, which was dismissed by a federal judge in California in December 2022. However, in a new ruling on June 6th, U.S. District Judge Michael Fitzgerald refused to dismiss the plaintiff’s “unfair competition” claims against Kardashian and Mayweather for their role in promoting the EMAX token in 2021. The judge allowed the plaintiff to amend the complaint, which alleged that Kardashian, Mayweather, and NBA star Paul Pierce “were profiting off endorsements at their fans’ expense by touting an investment opportunity that had no legitimate business plan.”

Judge Fitzgerald said that promoting a crypto token without disclosing that you’ve been paid to do so is an “unscrupulous and thereby unfair practice.” He added that the celebrity defendants provided no arguments to tip the balance in their favor. However, he cautioned that the class-action lawyers from Scott+Scott would have to explain how the celebrity’s promotion of the token affected its prices. Kardashian plugged the EMAX token in a June 2021 post on Instagram, while Mayweather wore the EMAX logo on his boxing trunks in a match against YouTube star Logan Paul in the same month.

According to its whitepaper, EthereumMax claims to be a “culture token” that “bridges the gap between the emergence of community tokens and the well-known foundational coins of crypto,” though it has nothing to do with Ethereum. The Securities and Exchange Commission charged Kardashian for unlawfully touting a crypto security in October 2022. She agreed to pay $1.26 million in penalties for her involvement in the EMAX promotion. The class action sought damages for investors that bought the token following the celebrity shills though actual amounts were not specified.

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