US District Judge Michael Fitzgerald in Los Angeles has denied Kim Kardashian’s request to dismiss a lawsuit in which she is accused of scamming investors in the EthereumMax cryptocurrency. The lawsuit alleges that Kardashian falsely hyped the digital tokens, leading investors to pay inflated prices. The judge found that the investors’ claims of false advertising based on Kardashian’s social media posts were valid. He also ruled that her statements suggesting the scarcity of EMAX tokens were misleading. However, the judge warned the investors that they have one more chance to address remaining shortcomings in their claims before they may be dismissed permanently.
Floyd Mayweather Jr.’s Ruling
In contrast to Kim Kardashian’s case, Floyd Mayweather Jr. received a favorable ruling from Judge Fitzgerald. The judge determined that Mayweather’s public statements about the growth prospects of the EMAX token amounted to “quintessential nonactionable puffery.” Mayweather cannot be sued for stating his belief in the future growth of EMAX at a Bitcoin conference in 2021.
SEC Settlement and Disclosure Requirements
It’s worth noting that the US Securities and Exchange Commission (SEC) previously announced that Kim Kardashian had settled allegations of breaking US rules by promoting EMAX tokens without proper disclosure. Kardashian agreed to pay $1.26 million and refrain from promoting any additional digital assets for three years. The SEC requires individuals promoting securities, including certain cryptocurrencies, to disclose any payments received for such endorsements.
Implications and Responses
While Kardashian’s lawyers have not yet responded to the recent ruling, the lawsuit against her will proceed. Investors will have the opportunity to revise and refile their allegations of fraud. Mayweather, on the other hand, successfully defended himself against the claims made by investors. The outcomes of these cases may have broader implications for celebrity endorsements in the cryptocurrency industry and shed light on the importance of proper disclosure to protect investors.