Reality star Kim Kardashian, boxing promoter Floyd Mayweather, and other celebrities are attempting to persuade a judge to toss out a revision of the lawsuit that seeks to hold them responsible for allegedly promoting a fake token, EthereumMax (EMAX), without disclosing it was a paid endorsement.
Kardashian and Mayweather looking for dismissal
On Feb. 21, Floyd Mayweather and Kim Kardashian filed a motion urging Judge Michael W. Fitzgerald of the Central District of California to dismiss a second amended complaint filed by EMAX investors in December 2022.
According to Kardashian and Mayweather, the renewed allegations regurgitated the “same basic theory” the court previously dismissed.
On Dec. 7, Judge Fitzgerald threw out the class action lawsuit against EMAX’s creators and its celebrity backers, including Mayweather, Kim Kardashian, Giovanni Perone, Jona Rechnitz, and former NBA star Paul Pierce, over their social media advocacy of the cryptocurrency.
Crypto enthusiasts who purchased EMAX tokens claimed they had lost money after listening to Kim Kardashian and Floyd Mayweather discuss the value of EMAX.
According to the lawsuit, the celebrity influencers conspired to artificially increase the cryptocurrency’s value.
Crypto investors must do research
In his initial ruling, Judge Fitzgerald acknowledged that the allegations in the lawsuit caused genuine concern about the ability of famous people to easily convince millions of unsuspecting fans and followers to buy anything with unparalleled ease.
However, Judge Fitzgerald reminded the complainants that it was their responsibility to perform due diligence before investing their money. According to the judge, the plaintiff’s claims were not sufficiently supported, particularly given the high threshold of proof required for fraud claims.
In his decision, Fitzgerald stated he would permit the disgruntled investors to resubmit their lawsuit against Kim Kardashian and Floyd Mayweather after revising some of their claims under several laws referenced in the initial complaint, including the Racketeer Influenced and Corrupt Organizations Act (RICO).
However, Kardashian, Mayweather, and their co-defendants are arguing that the idea that celebrities promoted EMAX tokens to artificially inflate their price, which is a central basis of the amended complaint, was already rejected by the court.
According to Kardashian and Mayweather’s request to dismiss the renewed lawsuit, EMAX tokens had no intrinsic value beyond what the market was willing to pay.
Reports from last year indicated that Kardashian, who has more than 345 million Instagram followers, was paid $250,000 to promote EMAX on her profile. To resolve the allegations, the famous reality TV star consented to pay $1.26 million in October 2022.