Class Action Lawsuit Reinstated
High-profile celebrities Kim Kardashian and Floyd Mayweather are set to face court once again. This follows the decision of US District Judge Michael Fitzgerald to reinstate a previously dismissed case accusing the pair of illicit marketing practices tied to the defunct cryptocurrency token, EthereumMax (EMAX).
Allegations of Unfair Competition
Originally filed in January 2022, the class action lawsuit charged Kardashian and Mayweather with endorsing a pump-and-dump scam that occurred in December of the same year. Despite some claims being dismissed by the California federal court, recent orders from Judge Fitzgerald have revived the accusations of “unfair competition.”
Celebrities and Crypto
In the spotlight of the lawsuit is the endorsement of the EMAX token by the two celebrities in 2021. Kardashian utilized her Instagram platform to promote the token in June, while Mayweather donned EMAX-branded boxing shorts during his match with YouTube host Logan Paul.
Kardashian was earlier charged by the SEC for unlawfully promoting crypto security. She settled this case in October 2022, agreeing to a $1.26 million payment tied to her role in advertising EMAX.
An Unfair Practice
Judge Fitzgerald has deemed the promotion of a cryptocurrency token without proper compensation disclosure as an “evil and unfair” practice. This announcement followed a careful review of the extensive 162-page lawsuit, in which it was suggested that the celebrities profited from endorsements that misled their fans.
Proving the Impact
Despite the revived lawsuit, Scott+Scott, the class action attorneys, are cautioned to validate the influence of the celebrity endorsements on the token’s pricing. They face the challenge of proving that the celebrities’ promotions were a deceptive business strategy and directly impacted the value of the EMAX token.
Token buyers, swayed by the perceived authenticity of the celebrity endorsements, are now seeking unspecified damages in the class action lawsuit.