The suit against reality TV star Kim Kardashian, Floyd Mayweather Jr and others for promoting cryptocurrency was dismissed by a federal judge in California, stating that their promotions did not necessarily influence investors.
The lawsuit which was filed in January claimed that EthereumMax colluded with celebrities to induce investors to purchase the EMax token, which drove the price higher.
Michael Fitzgerald, US District Judge, stated that the investors could amend and refile their proposed class action. The court’s verdict comes as other celebrity promoters are facing varying degree of lawsuits from investors of the failed cryptocurrency exchange FTX, whose collapse has deepened an ongoing “crypto winter.”
Sean Masson, an attorney who represents the investors in the EthereumMax case, said they plan to revise their claims to add “a host of additional facts demonstrating defendants’ wrongdoing and liability.”
Michael Rhodes, the lead attorney for Kardashian, said the defense is “pleased with the court’s well-reasoned ruling.”
Attorneys for Mayweather’s attorneys did not give a response immediately. One of the persons named as defendant in the lawsuit was former National Basketball Association star Paul Pierce.
Kardashian made an Instagram post in June 2021 that appears to promote EthereumMax while Mayweather wore the EthereumMax’s logo on his boxing trunks during one of his widely viewed fights.
Fitzgerald said that there was no evidence proffered to show that there was connivance between executives and promoters to mislead investors, rather than acting in their own self-interest.
The investors’ fraud claims failed because they had not stated whether or when they saw the promotions, the judge wrote.
While the investors were open to refile another suit, the claim was permanently dismissed under California’s consumer protection law, which Fitzgerald said applies to tangible goods and services, not “intangible goods” such as cryptocurrency.
Kardashian paid the SEC US$1.26 million as settlement against claims that she failed to disclose she was paid to promote EthereumMax tokens. Kardashian did not admit any wrongdoing.
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