The drama behind EMAX token promotions is not over.
Reality TV star Kim Kardashian and boxing sensation Floyd Mayweather face a class-action lawsuit once again. The charges relate to their alleged inappropriate endorsement of the now-defunct EthereumMax (EMAX) crypto token.
Filed in January 2022, the case against the celebrity pair accused them of participating in a "pump and dump" scheme, only to be dismissed by a federal judge in California in December 2022.
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However, on June 6th, US District Judge Michael Fitzgerald denied the dismissal of the "unfair competition" accusations against Kardashian and Mayweather for their part in promoting the EMAX token the previous year.
The revision of the 162-page complaint has now caught the judge's attention. The claim asserts that Kardashian, Mayweather, and NBA star Paul Pierce unfairly profited from endorsements, exploiting their followers with a questionable investment opportunity "that had no legitimate business plan."
The court is essentially dealing with an entirely new complaint, with new defendants and several new claims.
Judge Fitzgerald believes that promoting a crypto token without disclosing a financial incentive is an "unscrupulous and thereby unfair practice." He also stated that the celebrity defendants failed to present any argument that could tilt the scales in their favor.
Defendants do not offer a single benefit of allowing celebrities to endorse unvetted products without disclosing that they are being paid to do so.
In June 2021, Kardashian promoted the EMAX token via an Instagram post, while Mayweather wore the EMAX logo on his boxing shorts during a match against YouTube star Logan Paul that same month.
The US Securities and Exchange Commission (SEC) charged Kardashian in October 2022 for unlawfully promoting crypto security. At that time, Kardashian agreed to pay a $1.26 million penalty for her role in the EMAX promotion.
The return of these allegations underscores the necessary scrutiny and accountability that should accompany celebrity endorsements in the realm of cryptocurrencies.
