Court rules in Kim Kardashian’s favour in EthereumMax investors’ lawsuit

A U.S. court has granted a preliminary ruling in Kim Kardashian and Floyd Mayweather’s favour in the class-action suit brought by investors against them over the EthereumMax altcoin (EMAX). Bloomberg reports.

In the January filing the plaintiffs alleged that they paid inflated prices for the digital asset, because the model and former professional boxing star hyped the token. The defendant in the case also included former Boston Celtics basketball player Paul Pierce.

U.S. District Judge Michael Fitzgerald in Los Angeles noted in the order that the investors’ lawyers “appear to be trying to act” as the SEC, but “have not decided to treat the tokens as securities”.

In his view, the lawyers declined to adopt such a classification of the asset “for obvious reasons”. Fitzgerald said he would issue a final order later.

“There seems to be a lot wrong with this case,” the judge said at the start of the hearing.

The plaintiffs’ attorney tried to persuade the judge to allow the claims against the celebrities to be amended:

“If the plaintiffs knew the true facts surrounding the promoters’ financial interest in the tokens, and what they were paid for promotion, they wouldn’t have paid so much for them.”

The Ethereum-based altcoin rose to prominence in late spring 2021. On May 26, Pierce posted a promotional tweet — within a few days the price of EMAX peaked, then fell by more than 80% in 11 days.

In June Mayweather appeared wearing a shirt with the EthereumMax logo at the weigh-in and face-off against blogger Logan Paul.

Mid-June EMAX rose again — coinciding with Kardashian’s Instagram Story post. After that the coin slid down — from its peak the price had fallen 99.6% (CoinGecko).

In August, Kardashian’s lawyers filed a motion to dismiss the suit. The defence argued there was no evidence that her posts prompted investors to buy the tokens.

In October, the SEC announced that it had settled with Kardashian over charges of violating securities laws in promoting EMAX. The star agreed to pay $1.26 million in penalties, interest and disgorgement.

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