Reality TV star Kim Kardashian’s social media posts endorsing EthereumMax (EMAX) were false, a California judge ruled on Tuesday, allowing the case against her and other public figures to move forward.
The case brought by investors against Kardashian, retired boxer Floyd Mayweather Jr. and National Basketball Association Hall of Famer Paul Pierce among others, made headlines last year. The celebrities were accused of misleading investors through the promotion of digital assets tied to EMAX tokens, which are built on top of the Ethereum blockchain but are not tied to the second-largest cryptocurrency by market cap.
“Plaintiffs substantially amended the previous complaint adding over 100 pages of new allegations,” the order said.
In the expanded complaint, plaintiffs “adequately alleged” that Kardashian’s social media posts from May 2022 “were false” and a June post was “misleading as it falsely suggested the EMAX tokens were scarce,” according to the document.
A motion to dismiss similar claims by Pierce was denied, while Mayweather’s motion was partly granted on the grounds that his comments regarding EMAX at the Bitcoin 2021 conference were statements of belief.
Judge Fitzgerald also ruled in favor of blocking several securities claims added to the plaintiffs' amended complaint, granting the dismissals for a “lack of specificity but not for lack of privity,” with possibility to amend.
The defendants, including EMAX Holdings LLC, argued the investors – after a full year following their initial complaint, which hadn't mentioned securities – "now claim that purchases of EMAX Tokens are and have always been “investment contracts.”
In October, Kardashian was fined $1.2 million by the U.S. Securities and Exchange Commission for shilling EMAX to her millions of Instagram followers.
The plaintiffs have one last chance to amend their complaint until June 26.
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