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Kim Kardashian

Kim Kardashian Relieved as Judge Dismisses Crypto Scam Lawsuit

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An investor-led class action lawsuit against EthereumMax’s creators and celebrity backers Kim Kardashian and Floyd Mayweather Jr. over their social media promotion of the cryptocurrency was dismissed by a federal judge on Wednesday.

Investors who purchased EMAX tokens claimed they had lost money after believing the celebrity influencers about the value of cryptocurrencies. According to the lawsuit, the defendants conspired to unnecessarily inflate the value of EMAX tokens.

Judge noted that he recognized worries about celebrities including Kim Kardashian

According to the judge’s ruling, Michael Fitzgerald, “celebrities’ ability to readily compel millions of followers to buy snake oil with unprecedented ease and reach” is a legitimate concern raised by the lawsuit’s claims.

“But, while the law certainly places limits on those advertisers, it also expects investors to act reasonably before basing their bets on the zeitgeist of the moment.”

wrote Fitzgerald, of the Central District of California

According to the judge’s decision in U.S. District Court in Los Angeles, the plaintiffs’ claims were not sufficiently supported, particularly “given the heightened pleading standards” for fraud claims.

According to court documents, the plaintiffs in the case included Steve Gentile and Giovanni Perone, the co-founders of EthereumMax, as well as Justin French, a consultant, and developer for the cryptocurrency, in addition to Kim Kardashian, Mayweather, and former Boston Celtics star Paul Pierce.

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Kim Kardashian Relieved as Judge Dismisses Crypto Scam Lawsuit 2

In his decision, Fitzgerald stated that he would permit the plaintiffs’ attorneys to resubmit their lawsuit after revising some of their claims under a number of the laws cited in the initial complaint, including the Racketeer Influenced and Corrupt Organizations Act, or RICO.

The dismissal came after investors in the defunct cryptocurrency exchange FTX submitted a class-action lawsuit against former FTX CEO Sam Bankman-Fried and celebrity clients of the business, including Tom Brady of the NFL. They claimed that they had overstated the value of the company’s cryptocurrency tokens in their marketing materials.

The decision also came two months after Kim Kardashian agreed to settle SEC allegations that she failed to disclose a $250,000 payment for promoting EthereumMax on her Instagram account by paying $1.26 million and refraining from promoting cryptocurrencies for three years.

In his decision on Wednesday, Fitzgerald stated that the EthereumMax lawsuit is part of a larger controversy involving celebrity and influencer promotional tactics.

Kim Kardashian Wins a Tentative Court Ruling Over EthereumMax Lawsuit

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Kim Kardashian and Floyd Mayweather Jr. have won a preliminary court ruling that dismisses a lawsuit accusing them of defrauding EthereumMax investors.

Investors claimed in a January complaint that the reality television star and former boxing champion overvalued the EMAX tokens, causing them to pay “inflated prices” for blockchain-based digital assets. Paul Pierce, a former Boston Celtic, was also named as a defendant in the putative class-action lawsuit.

US District Judge said that Kim Kardashian didn’t view the tokens as a security

In a written order issued on Monday, US District Judge Michael Fitzgerald stated his “tentative view,” which is that the investors’ attorneys are “trying to act like” the US Securities and Exchange Commission, but “haven’t chosen to view the tokens as a security” and haven’t used a typical securities fraud claim in their case.

Fitzgerald claimed that for “obvious reasons,” the celebrities didn’t “care to label the tokens as a security.” The judge announced that he would later issue a formal written order.

Before the investor case receives a final ruling, a lawyer for Kim Kardashian declined to comment. An inquiry for comment was not immediately answered by an attorney for the investors. The decision is made in the midst of a larger discussion about the SEC’s regulatory authority over digital assets.

In October, the US markets watchdog revealed that Kim Kardashian had agreed to pay $1.26 million to resolve claims that she broke US regulations by promoting EMAX tokens. According to the SEC, Kardashian failed to disclose that she received $250,000 to post about the tokens on her Instagram account.

Kardashian reached a settlement without confirming or rejecting the SEC’s claims. She also consented to refrain for three years from promoting any new digital assets.

Anyone who advertises a security, such as a stock or even some varieties of cryptocurrencies, is required by law to disclose the amount, the source, and the nature of any payments they receive, in addition to the fact that they are being compensated for doing so.

Celebrities are also accused in several instances of promoting cryptocurrencies that end up as a scam or rug pull at a later stage.

Kim Kardashian Faces Charges From the SEC Over EthereumMax Promotions

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Kim Kardashian is facing scrutiny over her EthereumMax promotions. Kim has been charged by the Securities and Exchange Commission for promoting a crypto asset security issued and sold by EthereumMax on social media without reporting the compensation she got for the promotion.

In exchange for dropping the accusations, paying $1.26 million in fines, disgorgement, and interest, and cooperating with the Commission’s continuing investigation, Kardashian agreed to settle the case.

Kim Kardashian failed to reveal the promotion

According to the SEC’s decision, Kardashian failed to disclose that she received $250,000 from EthereumMax to write a post regarding EMAX tokens on her Instagram account. Kardashian’s tweet included a link to the EthereumMax website, where prospective investors could find instructions on how to buy EMAX coins.

“This case is a reminder that, when celebrities or influencers endorse investment opportunities, including crypto-asset securities, it doesn’t mean that those investment products are right for all investors. “We encourage investors to consider an investment’s potential risks and opportunities in light of their own financial goals.”

SEC Chair Gary Gensler

According to the SEC’s ruling, Kim Kardashian broke the federal securities laws’ anti-touting clause. Kardashian consented to pay the aforesaid $1.26 million. The amount included about $260,000 in disgorgement (which reflects her promotional money), plus prejudgment interest, along with a $1,000,000 penalty, without admitting or contesting the SEC’s allegations. Kardashian also consented to refrain for three years from endorsing any cryptocurrency-related securities.

Another lawsuit was filed earlier this year against Kim and Floyd Mayweather regarding the EthereumMax promotion. A class-action complaint accusing EthereumMax (particularly the business) and its celebrity boosters of cooperating to fraudulently inflate the price of the EMAX token.

In 2021, reality star Kim Kardashian stirred up controversy with a post on Instagram endorsing the EMAX token. Are you guys into crypto???? she asked in a post. This is just what my buddies recently informed me about the Ethereum Max token, not financial advice. She implied that she was paid to advertise it by including the hashtag #ad in the message.

While competing against YouTube celebrity Logan Paul, boxing great Floyd Mayweather Jr. promoted the token.