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Kim Kardashian EMAX Suit to Proceed as Court Considers Updated Complaint
A California judge backtracked on a tentative ruling to dismiss the allegations against the reality TV star after receiving a more detailed complaint.
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.
STORY CONTINUES BELOW
Although a tentative ruling from December indicated District Court Judge Michael Fitzgerald was leaning toward granting Kardashian’s motion to throw out the allegations against her, an attempt to dismiss an amended complaint by her was denied in a Tuesday order.
“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.
Sandali Handagama
Sandali Handagama is CoinDesk's deputy managing editor for policy and regulations, EMEA. She is an alumna of Columbia University's graduate school of journalism and has contributed to a variety of publications including The Guardian, Bloomberg, The Nation and Popular Science. Sandali doesn't own any crypto and she tweets as @iamsandali
Camomile Shumba
Camomile Shumba is a CoinDesk regulatory reporter based in the UK. Previously, Shumba interned at Business Insider and Bloomberg. Camomile has featured in Harpers Bazaar, Red, the BBC, Black Ballad, Journalism.co.uk, Cryptopolitan.com and South West Londoner.
Shumba studied politics, philosophy and economics as a combined degree at the University of East Anglia before doing a postgraduate degree in multimedia journalism. While she did her undergraduate degree she had an award-winning radio show on making a difference. She does not currently hold value in any digital currencies or projects.
