A judge will dismiss a lawsuit against Kardashian and other celebrities arguing they ripped off investors.
A judge appears on the verge of dismissing a lawsuit that accuses celebrities, including Kim Kardashian, of misleading investors about EthMax.
In January, investors filed a class action lawsuit against Kardashian, as well as other celebrities, accusing them of perpetrating a scam.
In October, Gary Gensler, 33rd Chair of the SEC, posted on Twitter that they “had charged Kim Kardashian for unlawfully touting a crypto security. This case is a reminder that, when celebrities / influencers endorse investment opps, including crypto asset securities, it doesn’t mean those investment products are right for all investors.”
Investors claimed that celebrity endorsements had tricked them into buying the EthereumMax cryptocurrency at “inflated prices.” The affected parties accused the celebrities of colluding with EMAX co-founders, Steve Gentile and Giovanni Perone, to pump up the price of the token, and entice buyers to dump it, leaving the new owners with a worthless bag of coins.
Other defendants in the proposed lawsuit include former boxing champion Floyd Mayweather Jr. and former NBA star Paul Pierce.
Judge Claims that Prosecutor’s Argument Lacks Consistency
Now, US District Judge Michael Fitzgerald has expressed his intention to dismiss the lawsuit in a written order. He said that despite “trying to act like” the Securities and Exchange Commission (SEC), the prosecution’s argument lacks consistency with the authority’s approach.
SEC Chairman Gary Gensler has said that he believes most cryptocurrencies are effectively securities, which issuers should register with the authority. The SEC is pursuing a high-profile case against Ripple Labs on that basis. They insist that the XRP token is a security that Ripple illegally issued without properly registering it.
However, in the case against the celebrities, the prosecution did not argue that EthMAX (EMAX) tokens were securities. They also neglected to invoke a standard securities fraud claim in your case.
The judge also noted that the celebrities did not promote the tokens as securities. Fitzgerald concluded by saying that he would later issue a final decision on the matter.
Kardashian Fined Over $1 Million for Illegally Shilling Ethereum Token
The ruling will come as a relief to Kardashian, who has faced additional scrutiny for her EMAX promotion. Last month, the SEC fined Kardashian for failing to disclose the payment she received for promoting the crypto asset.
Kardashian settled the charges by paying $1.26 million. This included $1 million, on top of the $250,000 he received from the promotion, plus additional interest.
Other celebrities have also lost millions due to their cryptocurrency choices, though through investments, not fines. American rapper Lil’ Baby admitted to losing millions to cryptocurrencies in a recent interview.
Meanwhile, soccer star Neymar and musicians Madonna and Eminem suffered substantial losses by investing in Bored Ape Yacht Club NFT.
By Audy Castaneda
