Investors involved in the EthereumMax (EMAX) class action lawsuit have been granted a final opportunity to revise their claims against celebrities accused of endorsing the now-defunct cryptocurrency.
In an order dated October 3, United States District Court Judge Michael Fitzgerald extended a third and final chance to EMAX investors to amend their complaint.
The class-action lawsuit, initiated in 2022, targeted prominent figures such as boxer Floyd Mayweather, NBA star Paul Pierce, and reality TV personality Kim Kardashian, alleging their promotion of EMAX constituted a “pump and dump” scheme.
While the lawsuit was initially dismissed by the judge in the previous year, it was resurrected in June, with the court refusing to dismiss the plaintiff’s claims of “unfair competition” against the celebrities. The recent order addressed four motions related to the case.
Investors in EMAX Lawsuit Get Final Chance to Revise Claims Against Celebrities
In the court’s decision, Mayweather’s motion to dismiss state consumer law claims was denied, with the plaintiffs adequately alleging materiality and Mayweather’s failure to disclose his status as a paid promoter. Similarly, Pierce’s motion to dismiss state consumer law claims and a manipulation claim was denied, as the court found sufficient evidence that Pierce or his representative had sold and traded tokens for his benefit.
One of EMAX’s co-founders, Giovanni Perone, had a motion to dismiss certain consumer claims denied as well. However, the court granted the motion to amend the dismissal of securities claims, citing a failure to allege that Perone personally sold tokens.
Judge Fitzgerald emphasized that the plaintiffs must refile their complaint, and the defendants must respond to the remaining claims, cautioning that this would be the final opportunity to amend the lawsuit.
Lawsuit Alleges Celebrity Promotion of EthereumMax as a ‘Pump and Dump’ Scheme
EthereumMax, unrelated to Ethereum, had claimed in its whitepaper to be a “culture token” that aimed to bridge the gap between community tokens and established cryptocurrencies.
In October 2022, the U.S. Securities and Exchange Commission (SEC) charged Kim Kardashian for her alleged unlawful promotion of EMAX as a security. She subsequently agreed to pay $1.26 million in penalties related to her involvement in the matter.