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Celebrity defendants Kim Kardashkianian and Floyd Mayweather are once again on the hook in a class action lawsuit alleging their improper promotion of the now defunct EthereumMax (EMAX) cryptocurrency token.
Although a class action lawsuit was filed against the couple in January 2022 for allegedly promoting a “pump and dump” scheme, it was dismissed by a federal judge in California in December 2022.
However, in a new June 6 ruling, U.S. District Judge Michael Fitzgerald refused to dismiss the plaintiff’s “unfair competition” lawsuit against reality TV star KarDashian and boxing champion Mayweather for their role in promoting the EMAX token in 2021.
The judge has now seen fit to amend the 162-page complaint alleging that KarDashian, Mayweather and NBA star Paul Pierce were “profiting from endorsements at the expense of their fans by touting an investment opportunity that had no legitimate business plan.”
“The court is essentially dealing with an entirely new complaint, with new defendants and several new lawsuits,” Fitzgerald said.
Judge Fitzgerald stated that advertising a cryptocurrency token without disclosing what you were paid for it is “unfair and therefore unfair practice.”
He added that the famous defendants did not provide arguments to tip the scales in their favor.
“The Defendants offer not a single benefit by allowing celebrities to advertise unverified products without disclosing that they are being paid to do so.”
However, he warned that Scott+Scott’s class action lawyers would have to explain how the celebrity promotion of the token affected its prices.
According to Reuters, Scott+Scott’s Sean Masson said the misleading celebrity endorsement was at the heart of Emax’s business model.
KarDashian listed the EMAX token in an Instagram post in June 2021, and Mayweather wore the EMAX logo on his boxer shorts in a match against YouTube star Logan Paul that same month.
According to the white paper, EthereumMax claims to be a “culture token” that “bridging the gap between the advent of community tokens and well-known crypto-currency foundation coins,” although it has nothing to do with Ethereum.
Related: Celebs who got burned supporting crypto and those who got away with it
In October 2022, the Securities and Exchange Commission accused KarDashian of illegally advertising the security of the cryptocurrency. She agreed to pay a $1.26 million fine for her participation in the EMAX promotion.
The class action lawsuit sought damages for investors who bought the token in the wake of the celebrities, although the actual amounts were not specified.