- Kim Kardashian and Floyd Mayweather are still under fire from EthereumMax investors, who are accusing them of pumping and dumping EMAX tokens in a second complaint.
- Kardashian and Mayweather claim the new lawsuit holds the same theory that was dismissed initially.
- The SEC previously charged Kardashian for posting about EthereumMax without disclosing payment.
Many A-list celebrities have been facing backlash from investors burnt by their endorsed pump-and-dumps.
Kim Kardashian and Floyd Mayweather have asked a federal judge to dismiss a second amended complaint filed by EthereumMax investors in December 2022. Judge Michael Fitzgerald initially dismissed a similar class action lawsuit against the celebrities also in December last year.
Kardashian, Mayweather, and other celebrity defendants claim this new case is based on the same theory as the first, which was dismissed on December 7, 2022. The latest complaint is again predicated on celebrities making paid endorsements of EthereumMax without disclosure(d) to sell EMAX tokens in a pump-and-dump scheme.
The original complaint was dismissed by Judge Fitzgerald later that year because the pump-and-dump allegations lacked merit, and investors are responsible for conducting due diligence on their investments.
Celebrities Have Been Warned
Kardashian has felt the sting of her involvement with EthereumMax before. The Securities and Exchange Commission (SEC) charged the reality TV star with unlawfully advertising EthereumMax without disclosing the $250,000 payment she had received in October last year. Kardashian reached a $1.26 million settlement with the SEC for the charge.
Other crypto class action lawsuits have been leveled due to prolific bankruptcies and market collapses. Comedian Larry David and retired quarterback Tom Brady both face prosecution for their roles in promoting the now-defunct crypto exchange FTX.
Rapper Snoop Dogg is facing a class action lawsuit for allegedly promoting Bored Ape Yacht Club NFTs, along with other celebrities such as Madonna, Justin Bieber, Post Malone, and DJ Khaled.
The host of celebrity endorsements around bad projects and tokens in the space has led the SEC to issue a warning.
“This case is yet another reminder to celebrities: The law requires you to disclose to the public from whom and how much you are getting paid to promote investment in securities, and you can’t lie to investors when you tout a security,” SEC Chair Gary Gensler said in charging NBA star Paul Piece for touting crypto tokens without disclosing payment — again, EMAX tokens.
On the Flipside
- Some famous faces more genuinely invested and interested in blockchain and crypto include Apple Co-founder Steve Wozniak, NFL star Odell Beckham Jr., and Ashton Kutcher.
Why You Should Care
There is very little evidence of true investment and belief in tokens from celebrities that are endorsing them across social media. The lawsuits and warnings from government agencies highlight these endorsements as mostly pure paid-for marketing and should be viewed as highly risky.