Kim Kardashian, reality TV star and Floyd Mayweather Jr. boxer won a preliminary court ruling in class action lawsuit regarding the Ethereummax token. The celebrities were accused of hyping Ethereummax, and pumping the EMAX cryptocurrency 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. Paul Pierce, an ex-star of the NBA, is also part of the class-action lawsuit.
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 remarried to the 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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