In October 2022, the SEC fined Kim Kardashian $1.26 million for promoting the cryptocurrency project EthereumMax (EMAX) to her 225 million Instagram followers. Kardashian did not disclose that she was paid $250,000 to promote the project. One British financial regulator at the time believed it to be one of the largest financial promotions in history. But it was also for a security asset, making it illegal. Other celebrities supporting the motion filed are Floyd Mayweather, Jr., Giovanni Perone, Paul Pierce, and Jona Rechnitz.
However, there has been a revised attempt to hold Kim Kardashian and other celebrities responsible for the promotion of the cryptocurrency project. Kardashian, Floyd Mayweather, and other personalities are trying to convince a judge to rule out the revision of the lawsuit. The defendants contend that the additional claims pursue the same core notion that the court previously rejected.
As per the lawsuit, the EthereumMax team collaborated with celebrities to sell EMAX tokens to investors. However, investors are referring to the project as a “pump-and-dump” scheme.
What are Kim Kardashian and others saying about the revised cryptocurrency lawsuit?
According to the defendant’s request to dismiss the case, the court rejected the premise that celebrity endorsements of the EMAX tokens would artificially boost their price. The defendants claim that the tokens had no intrinsic worth beyond what the market was willing to pay for them.
The motion also implies that investors held onto EMAX because of false statements made by celebrities. The move to dismiss, however, contends that the investors did not sustain any harm by merely holding onto the tokens.
Celebrities who advertise cryptocurrency have lately received a warning from the SEC. On Feb. 17, the SEC issued a reminder that the law requires celebrities to disclose their compensation and the source when endorsing the purchase of securities. Several famous athletes, such as Tom Brady, have also found themselves in a tight situation because of cryptocurrency promotions.