Investors Closer to Pursuing Legal Action Against Celebrities Promoting EthereumMax (EMAX) Token
Investors who were parties to a 2022 lawsuit may be closer to pursuing legal action against celebrities who promoted the EthereumMax (EMAX) token after a recent decision by a California judge.
Class-Action Lawsuits Given Green Light in Four US States
In a recent filing in the US District Court for the Central District of California, Judge Michael Fitzgerald granted a motion allowing class-action lawsuits filed in four US states to move forward. The lawsuits involve investors who purchased EMAX between May 2021 and June 2021 and will continue in New York, California, Florida, and New Jersey.
The filing stated, “Plaintiffs have demonstrated that the proposed state classes comport with the requirements of Federal Rules of Civil Procedure. However, the risk of inappropriate extraterritorial application of California and Florida law is simply too high with regard to the proposed Nationwide Class, as is the risk of individuated questions not amenable to common proof at trial.”
Source: Courtlistener
Celebrities and Entities Facing Legal Action
The decision paves the way for state-level civil action against celebrity endorsers such as Kim Kardashian, Floyd Mayweather, and Paul Pierce, as well as individuals and entities involved in the creation of EMAX, including EMAX Holdings, EMAX co-founder Giovanni Perone, and alleged EMAX “consultant, recruiter, and spokesman” Jona Rechnitz. Kardashian, in particular, promoted the token on her Instagram story, potentially reaching up to 200 million people in 2021.
Background Leading to the EMAX Lawsuit
EthereumMax gained attention in the crypto industry in 2021 following endorsements by celebrities like Kardashian. However, the project faced allegations of being a “pump and dump” scheme after its price surged over 116,000% in a week and then plummeted over 99%, causing significant losses for investors.
Although Fitzgerald initially dismissed the class-action lawsuit in December 2022, citing the need for buyers to conduct due diligence before investing, the door was left open for a refiling. This refiling occurred about seven months later in the same district under the same judge.
Additionally, Kardashian settled with the US Securities and Exchange Commission for $1.2 million in October 2022 for failing to disclose a $250,000 payment to promote EMAX.
Conclusion
The recent decision by Judge Fitzgerald allows investors to move forward with legal action against celebrities and entities involved in promoting the EthereumMax token. The outcome of these lawsuits could have significant implications for the crypto industry and the regulation of celebrity endorsements in the future.