Kim Kardashian’s attempt to convince a judge to dismiss a cryptocurrency lawsuit against her has been unsuccessful. 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 Dismissed In Crypto Hype Lawsuit
On Tuesday, US District Judge Michael Fitzgerald in Los Angeles dismissed the arguments put forth by Kim Kardashian’s lawyers, who sought the dismissal of false advertising claims related to her social media posts.
In these posts, Kardashian asserted that EMAX tokens would be recognized as a form of payment for table reservations at select nightclubs. Judge Fitzgerald concluded that the investors’ claims sufficiently demonstrated that the posts were unequivocally false.
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Furthermore, he determined that one of Kardashian’s posts, which implied a scarcity of EMAX tokens, was misleading. In November, Fitzgerald had initially dismissed the claims, stating that there were numerous issues with the case.
However, in his 84-page ruling on Tuesday, he acknowledged that the lawyers representing the investors had effectively rectified certain deficiencies from their previous complaint.
He cautioned that they would be granted only one more chance to address any remaining shortcomings in certain claims. And failure to do so would result in the claims being permanently dismissed.
Apart from pursuing legal action against celebrity promoters, the investors also filed lawsuits against several EMAX co-founders and consultants.
Kim Kardashian Concealed Payment Information
In October, the US Securities and Exchange Commission (SEC) made an announcement stating that Kim Kardashian had reached a settlement agreement, agreeing to pay $1.26 million. The settlement resolved allegations that Kardashian violated US regulations by promoting EMAX tokens.
The SEC claimed that Kardashian failed to disclose that she had received $250,000 as payment for posting about 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 abstain 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 obligated to disclose that they are receiving 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 regarding the potential growth of the EMAX token were primarily benign and did not carry significant legal implications.
The judge determined that Floyd Mayweather cannot be subjected 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 nonactionable puffery,” meaning they are considered exaggerated expressions of opinion that cannot be legally actionable.
Nevertheless, investors who contend that they paid inflated prices for blockchain-based digital assets will be granted the opportunity to amend and resubmit their accusations. These allegations assert that the former boxing champion neglected to disclose his financial compensation for endorsing EMAX.
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