The presiding judge overseeing a class-action lawsuit filed by investors in EMAX tokens has granted them a final opportunity to amend their claims against the celebrities they allege to have endorsed it.
In an order issued on October 3rd, United States District Court Judge Michael Fitzgerald extended a third and conclusive chance to the EthereumMax (EMAX) investors to submit a revised complaint. The class-action lawsuit, initiated in 2022, accused figures such as boxer Floyd Mayweather, NBA star Paul Pierce, reality TV personality Kim Kardashian, and others of promoting EMAX, which the lawsuit characterized as a “pump and dump” scheme. Although the judge dismissed the lawsuit last year, it was later reinstated in June, with the plaintiffs’ “unfair competition” claims against the celebrities remaining intact. The recent order addressed four motions. The court rejected Mayweather’s motion to dismiss claims related to state consumer laws, as it found that the plaintiffs had adequately alleged materiality and had revealed Mayweather’s failure to disclose his status as a paid promoter. Similarly, Pierce’s motion to dismiss claims related to state consumer laws and manipulation was denied, as it was sufficiently demonstrated that Pierce or his representative had sold and traded tokens for his own gain. One of EMAX’s co-founders, Giovanni Perone, had one of his motions to dismiss the same consumer claims denied but succeeded in having the dismissal of securities claims granted, as there was no sufficient evidence to allege that Perone personally sold tokens. The court has mandated that the plaintiffs resubmit their complaint, while the defendants are required to respond to the remaining claims. Judge Fitzgerald emphasized, “Plaintiffs have consistently failed to address the shortcomings identified by the Court and were explicitly cautioned that this would be their final opportunity to amend.” According to its whitepaper, EthereumMax, which is unrelated to Ethereum, positioned itself as a “cultural token” that served as a bridge between the burgeoning community tokens and the well-established foundational cryptocurrencies. In October 2022, the U.S. Securities and Exchange Commission charged Kim Kardashian with unlawfully promoting the token as a security, resulting in her agreement to pay $1.26 million in penalties for her involvement.
