US District Judge Refuses to Dismiss Crypto Lawsuit Against Kim Kardashian

News | June 7, 2023 By:

On Tuesday, June 6, 2023, US District Judge Michael Fitzgerald in Los Angeles refused to dismiss a lawsuit that claims Kim Kardashian cheated investors in a cryptocurrency named EthereumMax by making false claims about the digital tokens.

Judge Fitzgerald rejected arguments by Kardashian’s lawyers that he should dismiss false advertising claims over her social media posts in which she said EMAX tokens would be used at some nightclubs as payment for table reservations.

The judge said the investors showed enough evidence that the posts were “completely false.” He also said that a Kardashian post suggesting that EMAX tokens were rare was misleading.

In November 2022, Fitzgerald dismissed the claims, saying that there were many issues with the case. But in his 84-page ruling on Tuesday, he said that the investors’ lawyers had fixed some of the mistakes from their previous complaint. He warned that they would have only one more chance to correct any remaining issues in some of the claims. If they fail to do so, the claims would be dismissed for good.

In addition to suing celebrity promoters, investors sued some of the co-founders and consultants of EMAX.

The US Securities and Exchange Commission announced in October that Kardashian had agreed to pay $1.26 million to settle allegations that she broke US rules by promoting EMAX tokens. The SEC said Kardashian didn’t tell her Instagram followers that she got $250,000 to post on her Instagram account about the tokens.

Kardashian settled without admitting or denying the SEC allegations. And she agreed to not promote any more digital assets for three years.

According to the law, people who endorse securities, including some types of cryptocurrencies and stocks, must disclose that they are paid for their endorsements and provide information about the amount, source, and nature of those payments.