CNBC reported that a federal court rejected a planned class-action lawsuit against the creators and celebrity organisers of EthereumMax, including Kim Kardashian and Floyd Mayweather Jr.
Earlier this year, plaintiff Ryan Huegrich filed the lawsuit on behalf of all investors who acquired EthereumMax tokens between May 14 and June 17, 2021.
Judge Michael Fitzgerald decided that buyers should have known better, despite his concern about “the potential of superstars to entice millions of gullible followers to purchase snake oil with unparalleled ease and reach.”
Fitzgerald said in the opinion from the U.S. District Court in Los Angeles, “While the law undoubtedly lays restrictions on these advertising, it also expects investors to behave rationally before placing wagers on the zeitgeist of the time.”
Given the elevated pleading requirements for fraud claims, the court ruled that the charges lacked sufficient support, although he said that the attorneys might refile the lawsuit after revising some of the claims.
Kardashian’s attorney Michael Rhodes was quoted by CNBC as stating, “We’re happy with the court’s well-reasoned judgement.”
The U.S. Securities and Exchange Commission accused Kardashian in October of improperly advertising the EthereumMax token. She did not acknowledge or refute any of the regulator’s allegations and agreed to pay $1.3 million.
Tom Brady, Gisele Bundchen, Steph Curry, and Larry David were listed in a class action complaint filed against the promoters of the defunct FTX cryptocurrency exchange last month.