BERLIN (CoinChapter.com) — A California Federal Judge dismissed the civil lawsuit against several celebrities, including Kim Kardashian and Floyd Mayweather Jr., over promoting the EMax crypto token.
Micheal Fitzgerald, the US District Judge, has ruled to throw out the lawsuit in LA court, filed in January, over Ethereum Max creators scheming with celebrities to promote their token. As the basis for dismissal, the judge stated that there was no evidence that people investing in EMax saw the promotional material, while the case raises “legitimate concerns.”
The ruling also stated:
“But while the law limits those advertisers, it expects investors to act reasonably before basing their bets on the zeitgeist of the moment.”
The celebrities were accused of misleading their fan base to promote a token to drive up its price so that the creators could sell it at a profit. The price of EMax saw a significant increase following the promotion, as evident in the graph below.
The Emax trading volumes peaked at roughly $117 million around the time of the promotion.
The set promotion took place in June 2021, when Kim Kardashian posted this message on her Instagram for almost 330 million followers to see.
Even though Kim added a #AD in the end, she failed to disclose other details, such as the amount of compensation she got from the Ethereum Max issuers.
Additionally, SEC has fined Kim Kardashian $1 million for failing to acknowledge she was promoting a product.
As a result, she is banned from promoting any investments for the upcoming three years. In addition, the influencer needs to return the $260,000 she got as compensation for the Instagram post and interest.
Other celebrities that agreed to similar settlements with SEC include music producer DJ Khalid, professional boxer Floyd Mayweather, and actor Steven Seagal.
However, the scandal had deeper roots than just false promotions of celebrities.
The leading creators and promoters of Ethereum Max, Russ Davis, and Justin Maher, were involved in at least eight other “pump ‘n dump” scenarios. As a result, the prices of those tokens (Boom Baby, Rocket Bunny, and others) plummeted more than 99%, as opposed to their peak price.
Allegedly, Davis and Maher pocketed millions of dollars from the EMax hype, as stated in the class action suit against them. In addition, Maher used to work as a financial advisor at Northwestern Mutual but was fired for not following their policies and procedures.
Moreover, the SEC directory states that Maher “was permitted to resign while under internal review for allegations that the [he] was involved in a cryptocurrency shilling scam.”
Davis, on his part, pointed his finger at another cofounder of EMax, Giovanni Perone, alleging the “pump ‘n dump” operation was fully under his control.
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