Investors who participated in a 2022 lawsuit may be nearing the possibility of taking legal measures against celebrities who endorsed the EthereumMax (EMAX) token following a recent ruling by a California judge.
In a filing on Wednesday in the US District Court for the Central District of California, Judge Michael Fitzgerald approved a motion that allows class-action lawsuits submitted in four US states to advance, but rejected the plea for a nationwide class against EMAX promoters. This ruling will permit cases involving investors who acquired EMAX between May 2021 and June 2021 to proceed in New York, California, Florida, and New Jersey.
“The plaintiffs have shown that the proposed state classes align with the stipulations of Federal Rules of Civil Procedure,” the filing notes. “Nevertheless, the risk of inappropriate application of California and Florida law beyond their borders is excessively high regarding the proposed Nationwide Class, as is the danger of individual questions not suitable for common proof at trial.”
This ruling paves the way for state-level civil action against celebrity Kim Kardashian, boxer Floyd Mayweather, and former NBA star Paul Pierce, all of whom endorsed the token, as well as individuals and entities involved in its inception, including EMAX Holdings, EMAX co-founder Giovanni Perone, and alleged EMAX “consultant, recruiter, and spokesperson” Jona Rechnitz. Kardashian promoted the token through her Instagram story, potentially reaching up to 200 million individuals in 2021.
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Looking back at 2021, and the events that led to the EMAX lawsuit
EthereumMax, which its white paper refers to as a “culture token,” captured widespread attention in the crypto world in 2021 after endorsements from several high-profile celebrities, including Kardashian. Numerous individuals alleged that the project was a “pump and dump” scheme after the price surged over 116,000% within a week and then plummeted over 99%, leaving many investors at a loss.
Although Fitzgerald initially dismissed the class-action lawsuit in December 2022, asserting at that time that the token’s purchasers were expected to conduct due diligence before investing, he left the possibility for them to refile. They did so about seven months later, in the same court, to be overseen by the same judge.
Independently, Kardashian reached a $1.2 million agreement with the US Securities and Exchange Commission in October 2022 for not disclosing a $250,000 payment to promote EMAX.
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