Reality TV star Kim Kardashian and boxing legend Floyd Mayweather Jr. reportedly won a tentative court ruling in a class-action lawsuit involving the Ethereummax token. Investors have accused the celebrities of hyping Ethereummax and pumping the EMAX crypto token.
Judge’s Tentative View
U.S. District Judge Michael Fitzgerald gave his “tentative view” Monday in a class-action lawsuit filed in January against Kim Kardashian and Floyd Mayweather Jr. over their promotion of the Ethereummax token, Bloomberg reported Tuesday. Former NBA star Paul Pierce is also a defendant in the proposed class-action suit.
The lawsuit alleges that the reality television star and ex-boxing champion scammed investors by hyping the Ethereummax token, causing investors to have to buy EMAX at “inflated prices.” The plaintiffs detailed that the token’s price surged 1,370% soon after its launch in May last year but then hit an all-time low in July — “a 98% drop from which it has not been able to recover.”
In Monday’s written order, Judge Fitzgerald explained the lawyers representing the investors are “trying to act like” the U.S. Securities and Exchange Commission (SEC), the publication conveyed. He added that they “haven’t chosen to view the tokens as a security” and didn’t invoke a standard securities fraud claim in their case. Fitzgerald also noted that the celebrities did not “care to label the tokens as a security for obvious reasons.” The judge said he will issue a final written order later.
Kardashian Recently Settled With SEC
The SEC charged Kardashian on Oct. 3 “for touting on social media a crypto asset security offered and sold by Ethereummax without disclosing the payment she received for the promotion.” The securities regulator detailed at the time:
The SEC’s order finds that Kardashian failed to disclose that she was paid $250,000 to publish a post on her Instagram account about EMAX tokens, the crypto asset security being offered by Ethereummax.
The SEC noted that without admitting or denying its findings, Kardashian “agreed to pay $1.6 million, including approximately $260,000 in disgorgement, which represents her promotional payment, plus prejudgment interest, and a $1,000,000 penalty.” She also agreed “to not promote any crypto asset securities for three years.”
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Do you think Kim Kardashian and Floyd Mayweather Jr. should be responsible for the losses suffered by EMAX investors? Let us know in the comments section below.
A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.
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