A federal judge dismissed a proposed class-action lawsuit against EthereumMax founders and celebrity promoters, including Kim Kardashian and boxer Floyd Mayweather Jr., CNBC reported.
Plaintiff Ryan Huegrich earlier this year brought the suit on behalf of all investors who purchased EthereumMax tokens between May 14-June 17, 2021.
Judge Michael Fitzgerald ruled that customers should have known better, even though he said he worried about “celebrities’ ability to readily persuade millions of undiscerning followers to buy snake oil with unprecedented ease and reach.”
“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,” Fitzgerald wrote in the ruling from the U.S. District Court in Los Angeles.
The judge said the allegations were insufficiently backed given heightened pleading standards for fraud claims, but he said lawyers could refile the suit after amending some of the claims.
“We’re pleased with the court’s well-reasoned decision on the case,” CNBC cited Kardashian lawyer Michael Rhodes as saying.
Kardashian in October was charged with unlawfully promoting the EthereumMax token by the U.S. Securities and Exchange Commission. She didn’t admit to or deny any of the regulator’s findings and agreed to pay $1.3 million.
Last month, Tom Brady, Gisele Bundchen, Steph Curry and Larry David were named in a class action lawsuit brought against promoters of the collapsed FTX crypto exchange.
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