A federal judge in California has dismissed a class action lawsuit against reality TV star Kim Kardashian, boxing champion Floyd Mayweather, and the founders of EthereumMax. He said the applications did not meet “defense standards” for fraud allegations. However, the judge left a loophole that would allow plaintiffs to reopen the proposed class action action if certain provisions are amended. After the development, altcoin EthereumMax experienced a rise. Here are the details…
Investors are expected to act reasonably
EthereumMax ads, which caused many celebrities to be questioned in the crypto money market, have been on the agenda in the past months. In the original January 7 court filing submitted by the Scott+Scott Law Firm, plaintiffs argued that Kardashian, Mayweather, as well as former NBA superstar Paul Pierce, failed to disclose that they were paid to promote EthereumMax (EMAX). The plaintiffs cited that these individuals had incentives to “artificially inflate the price of the token” by using “false or misleading statements.”
While Kim Kardashian promoted EMAX in a post shared on Instagram in June 2021, Floyd Mayweather had the EMAX logo attached to his outfit at a boxing match against YouTube star Logan Paul that same month. According to the news, Judge Michael Fitzgerald stated that the fraud allegations were baseless. At the end of the day, he dismissed the lawsuit on 7 December on the grounds that investors also have the responsibility to do due diligence on their investments. The judge used the following statements:
However, while the law certainly places limitations on these advertisers, it also expects investors to act reasonably before basing their bets on the excitement of the moment.
Altcoin price rises
Altcoin EMAX gained slight momentum after the lawsuit was dismissed. The coin rose from $0.00000001632 to $0.00000001713.
The purchasing power of celebrities
But Judge Fitzgerald acknowledged the power that new technologies and social media platforms provide celebrities to create potentially fraudulent promotional schemes. “This action shows that almost anyone with the technical skills and/or connections can issue a new currency and create their own digital market overnight,” Fitzgerald said. Celebrities now have “the ability to easily convince millions of followers of a product with unprecedented ease and reach,” he added.
But despite Judge Fitzgerald’s dismissal of the case, the investor’s war may not be over. It turned out that Fitzgerald would allow plaintiffs to reopen the case if the investor’s legal team changed a few provisions in his original file.
Kardashian was penalized for promoting EthereumMax on her social media account, as we reported on Kriptokoin.com. On October 3, Kardashian reached a $1.26 million settlement with the U.S. Securities Exchange Commission (SEC) after allegedly advertising EthereumMax for $250,000 and not disclosing the ad. Mayweather’s legal team has long denied any affiliation with EthereumMax.
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