Kim Kardashian’s attempt to convince a judge to dismiss a lawsuit against her over cryptocurrency has failed. The lawsuit alleges that she engaged in fraudulent activities by promoting EthereumMax, a cryptocurrency, and misleading investors with exaggerated claims.
Kardashian’s lawyers’ misleading arguments rejected in Crypto Hype lawsuit
On Tuesday, U.S. District Judge Michael Fitzgerald in Los Angeles dismissed arguments made by Kim Kardashian’s lawyers, who sought dismissal of false advertising claims related to her social media posts.
In these posts, Kardashian claimed that EMAX tokens would be recognized as a form of payment for table reservations at select nightclubs. Judge Fitzgerald concluded that the investors’ allegations sufficiently established that the postings were unequivocally false.
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Additionally, he ruled that one of Kardashian’s posts, which suggested a shortage of EMAX tokens, was misleading. In November, Fitzgerald had initially dismissed the claims, stating that there were many problems with the case.
But in his 84-page ruling on Tuesday, he acknowledged that the lawyers representing the investors had effectively corrected some deficiencies from their earlier complaints.
He warned that they would only be given one more chance to address any remaining deficiencies in some claims. And failure to do so would result in the claims being permanently rejected.
In addition to pursuing legal action against celebrity promoters, the investors also filed lawsuits against several EMAX founders and consultants.
Kim Kardashian hidden payment information
In October, the US Securities and Exchange Commission (SEC) made an announcement that Kim Kardashian had reached a settlement agreement and agreed to pay $1.26 million. The settlement resolved allegations that Kardashian violated US regulations by marketing EMAX tokens.
The SEC alleged that Kardashian failed to disclose that she had received $250,000 in payment for reposting the tokens on her Instagram account.
It’s important to note that Kardashian settled the case without admitting or denying the allegations made by the SEC. As part of the settlement, she also agreed to refrain from promoting any further digital assets for a period of three years.
Under the law, individuals who endorse securities, including certain types of cryptocurrencies and stocks, are required to disclose that they receive compensation for their endorsements and also provide information about the amount, source and nature of those payments.
Boxing icon Floyd Mayweather Jr. received a more favorable ruling from the judge, who concluded that his public statements about the potential growth of the EMAX token were primarily benign and had no significant legal ramifications.
The judge ruled that Floyd Mayweather cannot be subject to a lawsuit for expressing his personal “belief” regarding the future growth of EMAX during a Bitcoin conference in 2021. According to the judge, such statements fall under the category of “quintessential non-actionable puffery.” which means that they are regarded as exaggerated expressions of opinion that cannot be legally spoken.
Nonetheless, investors who claim to have paid high prices for blockchain-based digital assets will be given the opportunity to amend and resubmit their allegations. These allegations allege that the former boxing champion neglected to disclose his financial compensation for endorsing EMAX.
Featured image from UnSplash, chart from TradingView.com