Judge Revives EMAX Class Action Against Kim Kardashian and Floyd Mayweather
Kim Kardashian and Floyd Mayweather are facing a revived class action lawsuit that accuses them of promoting the now-defunct cryptocurrency token EthereumMax (EMAX) in an improper manner.
Initially filed in January 2022, the class-action suit alleged that Kardashian and Mayweather participated in a “pump and dump” scheme. However, in December 2022, a federal judge in California dismissed the case.
On June 6, U.S. District Judge Michael Fitzgerald made a new ruling, refusing to dismiss the plaintiff’s claims of “unfair competition” against Kardashian and Mayweather. The judge amended the 162-page complaint, which accused the defendants, including NBA star Paul Pierce, of profiting from endorsements without a legitimate business plan.
Judge Fitzgerald stated that promoting a cryptocurrency token without disclosing payment is an “unscrupulous and unfair practice.” He also noted that the celebrity defendants failed to provide any arguments in their favor.
However, the judge emphasized that the class-action lawyers would need to demonstrate how the celebrity endorsements impacted the token’s prices.
Scott+Scott attorney Sean Masson argued that misleading celebrity endorsements were fundamental to the Emax business model.
Kardashian promoted the EMAX token in a June 2021 Instagram post, while Mayweather wore the EMAX logo on his boxing trunks during a match against YouTuber Logan Paul in the same month.
EthereumMax, unrelated to Ethereum, claims to be a “culture token” bridging the gap between community tokens and established cryptocurrencies.
In October 2022, the Securities and Exchange Commission charged Kardashian for unlawfully promoting a crypto security, resulting in her agreement to pay $1.26 million in penalties.
The class action seeks damages for investors who purchased the token based on the celebrity endorsements, although the specific amounts were not specified.