A judge in Los Angeles has ruled that Kim Kardashian, Floyd Mayweather, and other celebrities cannot evade claims made by investors in the now-worthless EthereumMax crypto token.
U.S. District Judge refused to dismiss California unfair competition claims against Kardashian and Mayweather
A judge in Los Angeles has ruled that Kim Kardashian, Floyd Mayweather, and other celebrities cannot evade claims made by investors in the now-worthless EthereumMax crypto token. The investors allege that the celebrities engaged in deceptive promotion of the tokens during the 2021 cryptocurrency boom.
U.S. District Judge Michael Fitzgerald refused to dismiss California unfair competition claims against Kardashian and Mayweather, stating that the amended complaint adequately demonstrated that the celebrities were profiting from endorsements while touting an investment opportunity without a legitimate business plan. The judge emphasized that promoting a cryptocurrency without disclosing payment or having a valid basis for belief in its value is an unscrupulous practice and potentially unfair to consumers.
The ruling serves as a warning to celebrities and social media influencers who are paid to promote risky investments to their followers, and the judge rejected arguments from the defense that plaintiffs could not reasonably rely on social media posts by celebrities when making investment decisions. Additionally, the lawsuit alleges that the EMax tokens were part of a pump-and-dump scheme, with insiders using celebrity endorsements to drive up prices before selling off the tokens.
While the judge acknowledged that plaintiffs would need to demonstrate how each celebrity's promotion specifically affected the value of EMax, he allowed the case to proceed based on the theory that celebrity endorsements distorted the market for the tokens.
