Kim Kardashian and Floyd Mayweather Jr. have won a preliminary court's ruling in a class-action lawsuit regarding the EMAX token.
Investors accused the celebrities of promoting Ethereummax and pumping the price of the EMAX token.
on Monday in a class-action lawsuit launched in January against Kim Kardashian and Floyd Mayweather Jr. for their promotion of the Ethereummax (EMAX) token.
Former NBA star Paul Pierce is also included as a defendant in the planned class-action lawsuit.
The lawsuit claims that the television celebrity and former boxing champion defrauded investors by overhyping the Ethereummax token, forcing them to purchase EMAX at "inflated pricing." As per reports, the token's price soared 1,370% shortly after its launch in May of last year before plunging to an all-time low in July — "a 98% loss from which it has not been able to recover."
In Monday's written order, Judge Fitzgerald stated that the lawyers representing the investors are "trying to act like" the US SEC. He went on to say that they "haven't decided to consider the tokens as a security" and that they did not file a traditional securities fraud lawsuit in their case.
Fitzgerald further stated that the celebs "didn't want to designate the tokens as security for obvious reasons." The judge stated that a final written order will be issued later.
The SEC charged Kardashian on October 3 for promoting a crypto asset security offered and sold by Ethereummax on social media without reporting the payment she got for the promotion.
According to the securities commission, “Kardashian failed to declare that she was paid $250,000 to make a post on her Instagram account about EMAX tokens.”
The SEC stated that Kardashian agreed to pay $1.6 million without admitting or denying its findings, including about $260,000 in disgorgement, which represents her promotional payout, plus prejudgment interest and a $1,000,000 penalty. She also pledged to "not promote any cryptocurrency asset security for the next three years."
Do you believe Kim Kardashian and Floyd Mayweather Jr. should be held accountable for EMAX investors' losses? Please share your thoughts in the comments box below.
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