A federal judge in California on Wednesday dismissed a lawsuit against reality star Kim Kardashian, boxing legend Floyd Mayweather Jr. and others for their role in promoting cryptocurrency, Zadocean Press reports.
The magistrate said it was not clear whether the investors who filed suit actually saw the promotions.
The lawsuit, filed in January, alleges that EthereumMax executives planned a scheme with celebrity promoters to encourage investors to buy the EMax token, driving up its price and allowing them to sell their own tokens at a profit.
U.S. District Judge Michael Fitzgerald said in Los Angeles that investors can amend and redraft their proposed class action.
The decision comes as other celebrity promoters face lawsuits from users of the failed cryptocurrency exchange FTX, whose collapse deepened the ongoing “crypto winter.”
Shawn Masson, an attorney representing the investors in the EthereumMax lawsuit, said they plan to revise their claims to add “multiple additional facts demonstrating the defendants’ wrongdoing and liability.”
Michael Rhodes, Kardashian’s lead attorney, said the defense was “satisfied with the court’s well-reasoned decision.”
Mayweather’s lawyers did not immediately respond to a request for comment. Former NBA star Paul Pierce is also named in the lawsuit.
Kardashian promoted EthereumMax in a June 2021 Instagram post, and Mayweather wore the company’s logo on his boxer shorts during a widely watched fight, investors say.
In Wednesday’s ruling, Fitzgerald said the investors failed to prove that the executives and promoters planned to mislead investors rather than act in their own self-interest.
Photo: Getty Images
The investors’ fraud claims failed because they had failed to state if and when they saw the promotions, the judge wrote.
While the investors can reconsider those claims, Fitzgerald ultimately dismissed their claim under the California Consumer Protection Act, which he says applies to tangible goods and services, not “intangible goods” like cryptocurrency.
Kardashian agreed in October to pay the Securities and Exchange Commission (SEC) $1.26 million to settle claims that she failed to disclose that she was paid to promote EthereumMax tokens, reports BTA. She has pleaded not guilty.
