Kim Kardashian’s EMAX case moves forward as judge denies motion to dismiss in California.
A judge in California has ruled that Kim Kardashian, a reality TV star and businesswoman, posted false information on social media while promoting EthereumMax (EMAX). The ruling allows the plaintiffs to proceed with the case against Kim Kardashian, retired boxer Floyd Mayweather Jr., and NBA Hall of Famer Paul Pierce. Kardashian’s lawyers had attempted to dismiss the case, claiming there was no evidence investors had bought EMAX tokens based on her posts on Instagram. However, Judge Michael Fitzgerald rejected this claim, stating that Kardashian’s posts contained “literally false” information and that one post in particular contained misleading information which suggested that EMAX tokens were scarce. Judge Fitzgerald also rejected similar arguments brought by Pierce’s legal team. Mayweather, on the other hand, saw some respite as the ruling declared his EMAX promotion simply expressed his belief and that his statements were “quintessential nonactionable puffery.” The case was brought by investors who accused the retired boxer of promoting the EMAX tokens at a Bitcoin conference in 2021. Although it was a Bitcoin event, Mayweather and his entourage arrived at the venue wearing EMAX t-shirts.
In January last year, investors sued Kardashian, Pierce, and Mayweather for their involvement in EMAX promotions. According to the class-action suit, the named celebrities promoted EMAX and influenced fans and followers to buy the tokens. The investors believe that Kim Kardashian and other celebrities worked with EMAX to artificially spike the asset’s price by deliberately posting “false or misleading statements.” EMAX crashed by about 97% between June 2021 and January 2022, which irked investors who brought the class-action suit as they all believed it was a pump-and-dump scheme. The suit also claimed that the branding as “EthereumMax” was deliberately misleading because the project has no connection with Ethereum.
In December, Fitzgerald had issued a tentative ruling in favor of Kim Kardashian, Mayweather, and EMAX. However, he tentatively dismissed the motion regardless, as he believed the plaintiff’s submitted facts were inadequate and investors must take necessary precautions before dumping funds into a project regardless of an advertiser’s misconduct. The recent rejection of the motion to dismiss the case is a turnaround from the tentative ruling. In 2021, the UK’s Financial Conduct Authority (FCA) had criticized Kardashian’s post. She was also fined by the US Securities and Exchange Commission (SEC) for failing to reveal the post was a paid advert. Kim Kardashian allegedly settled the case by paying a $1.26 million fine.