TLDR
- Four state-level class actions against EthereumMax promoters are allowed to proceed.
-
EthereumMax investors claim celebrity promotions led to heavy losses.
-
Kim Kardashian, Floyd Mayweather, and Paul Pierce face legal action.
-
EthereumMax token saw a massive price surge followed by a drastic crash.
EthereumMax (EMAX) investors have scored a partial victory in their class-action lawsuit against celebrities who promoted the token. A recent ruling by Judge Michael Fitzgerald of the U.S. District Court for the Central District of California permits lawsuits in four states—California, New York, Florida, and New Jersey—to proceed. However, a nationwide class-action lawsuit against the promoters was rejected.
The lawsuits involve investors who purchased EMAX tokens during a brief period in 2021, from May to June. This was the time when the token’s price skyrocketed by over 116,000% before it collapsed by more than 99%. This drastic fluctuation in the token’s value left many investors with significant losses.
Class Action Lawsuits to Proceed in Four States
Judge Fitzgerald’s ruling allows state-level class actions in four U.S. states to continue. The class actions target high-profile figures like Kim Kardashian, Floyd Mayweather, and Paul Pierce, all of whom publicly endorsed EthereumMax in 2021. Kardashian, for instance, promoted the token on her Instagram story, which potentially reached up to 200 million people.
Despite allowing state-level actions to move forward, the judge expressed concern about applying California and Florida laws across other states. He stated that this could result in “inappropriate extraterritorial application” of those laws. Thus, the proposed nationwide class was deemed unsuitable for a collective lawsuit.
EthereumMax’s Rise and Fall Sparked Legal Action
EthereumMax, a cryptocurrency described in its white paper as a “culture token,” gained attention in 2021 when it was promoted by several well-known celebrities.
The token’s price surged dramatically within a short time, attracting many retail investors. However, after the sharp rise, it experienced a drastic fall, leading some investors to accuse the project of being a “pump and dump” scheme.
This rapid price surge followed by an equally sharp collapse has fueled the lawsuits against the promoters. The investors argue that the celebrity endorsements misled them into purchasing the token, contributing to their financial losses. The class actions seek to hold these figures accountable for their involvement in promoting EthereumMax.
Previous Settlements and Legal Developments
This ruling is not the first time celebrities involved in EthereumMax have faced legal action. In 2022, Kim Kardashian settled with the U.S. Securities and Exchange Commission (SEC) for $1.2 million after failing to disclose her payment for promoting the token.
She had received $250,000 for her Instagram post promoting EMAX. The SEC charged Kardashian for violating rules about failing to disclose paid promotions.
Similarly, former NBA player Paul Pierce faced legal issues in 2023. The SEC fined him $1.4 million for promoting EthereumMax on social media without disclosing his compensation. Pierce had received over $244,000 in EMAX tokens for his promotion, and he was accused of making misleading statements about the token’s potential.
