Investors Pursue Legal Action Against Celebrity Endorsers of EthereumMax
Investors entangled in a lawsuit stemming from the EthereumMax (EMAX) token are on a path toward legal recourse against celebrity endorsers, thanks to a recent ruling from a California judge. In a decision issued on Wednesday, Judge Michael Fitzgerald of the US District Court for the Central District of California allowed several state-level class-action suits to proceed while rejecting a plea for a consolidated national class action against the promoters of EMAX. This ruling specifically permits cases to advance in New York, California, Florida, and New Jersey, focusing on individuals who purchased EMAX during a brief window from May to June 2021.
“Plaintiffs have demonstrated that the proposed state classes comply with Federal Rules of Civil Procedure.”
However, he expressed concerns about the potential complications of applying California and Florida laws beyond their borders, as well as issues related to individualized claims that could complicate the trial process.
High-Profile Figures Involved
This ruling also opens the door for legal actions against high-profile figures including Kim Kardashian, Floyd Mayweather, and Paul Pierce—all of whom played a role in promoting the token, alongside creators and affiliates like EMAX Holdings and co-founder Giovanni Perone. Kardashian’s promotional efforts on her Instagram account alone reached an audience of nearly 200 million followers at the time.
The Backdrop of the Lawsuit
To understand the backdrop of this lawsuit, it is essential to revisit 2021 when EthereumMax gained notoriety in the cryptocurrency sector, largely due to endorsements from A-list celebrities. The token was marketed as a “culture token,” yet many investors alleged it functioned as a “pump and dump” scheme, skyrocketing in value by over 116,000% within a week, only to plummet more than 99% shortly after, leaving countless investors at a loss.
Initially, Judge Fitzgerald had dismissed the class-action case in December 2022, reasoning that investors were expected to conduct due diligence prior to their investments. However, following this dismissal, plaintiffs refocused their efforts and refiled their claims in the same district about seven months later.
Ongoing Legal Entanglements
In a related incident, Kardashian had already settled with the US Securities and Exchange Commission in October 2022, agreeing to pay $1.2 million for neglecting to disclose a $250,000 amount she received for promoting EMAX. This legal entanglement thus continues to unfold, posing questions on accountability for celebrity endorsements in the volatile world of cryptocurrencies.
