In a recent US court ruling, reality TV star Kim Kardashian was denied her request to dismiss an ongoing crypto-related lawsuit against her. Kardashian is being accused of scamming investors by promoting EthereumMax on her social media accounts without revealing that she was paid for doing so. Her lawyers asked the court to dismiss the false advertising claims over her social media posts, claiming that EMAX tokens would be accepted for table reservations at specific nightclubs. However, the court disagreed, judging that the investors had sufficiently argued that the posts were indeed “literally false.”
Additionally, the court found that Kardashian’s post, suggesting that EMAX tokens were scarce, was misleading. While the Los Angeles court had dismissed the claims in November, noting that “there is just a lot that is wrong with this case,” the recent ruling allows for the lawyers of the investors to remedy some of the deficiencies in their previous versions of the complaint. The judge warns, however, that they have only one more chance to address the remaining shortcomings in some claims; otherwise, they will be permanently dismissed.
In contrast, ex-boxing champion Floyd Mayweather Jr. managed to escape similar charges. The judge ruled that his statements regarding the EMAX token’s future growth prospects were mostly harmless. Mayweather can’t be sued for expressing his “belief” about EMAX’s future expansion at a 2021 Bitcoin conference, as it amounts to “quintessential non-actionable puffery.” Nevertheless, investors who allege they paid inflated prices for the cryptocurrency will have the opportunity to revise and refile their accusations that Mayweather failed to disclose his paid promotion of EMAX.
This case highlights the responsibilities celebrities and influencers hold when promoting cryptocurrencies on social media channels, as well as the legal consequences that may arise if proper disclosures are not made. Kardashian’s recent settlement of $1.26 million with the US Securities and Exchange Commission (SEC) for her role in promoting EMAX tokens without disclosure is an example of these ramifications. The SEC revealed that Kardashian had not stated that she received $250,000 for her Instagram post about the tokens, which resulted in breaking US rules.
In light of these events, it’s essential for investors to conduct thorough market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for personal financial losses. Furthermore, it’s crucial for celebrities and influencers to be transparent about their paid endorsements to avoid legal actions and maintain the trust of their followers.