Kim Kardashian crypto hype lawsuit advances over her alleged lies
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Reality TV star Kim Kardashian is accused of scamming investors in EMAX crypto by falsely hyping the digital tokens.
PHOTO: REUTERS
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Mill Valley, California - Reality TV star Kim Kardashian failed to persuade a judge to throw out a lawsuit in which she is accused of scamming investors
Boxing legend Floyd Mayweather Jr fared better, with the judge finding that his public statements about the growth prospects for the EMAX token were mostly harmless.
But investors who claim they paid “inflated prices” for the blockchain-based digital assets will get a chance to revise and refile their allegations that the former boxing champion failed to disclose he was being paid to promote EMAX.
US District Judge Michael Fitzgerald in Los Angeles on Tuesday rejected arguments by Ms Kardashian’s lawyers that he should dismiss false advertising claims over her social media posts, in which she said EMAX tokens would be accepted at certain night clubs as payment for table reservations.
The judge said the investors adequately alleged the posts were “literally false”. He also found that a post by Ms Kardashian suggesting that EMAX tokens were scarce was misleading.
Judge Fitzgerald had dismissed the claims in November. But in Tuesday’s 84-page ruling, he noted that lawyers for the investors “artfully cured” some deficiencies in their previous version of the complaint, but warned that he was giving them just one more opportunity to address remaining shortcomings in some claims or they will be dismissed for good.
The United States Securities and Exchange Commission (SEC) announced in October that Ms Kardashian had agreed to pay US$1.26 million (S$1.7 million) to settle allegations that she broke US rules by touting EMAX tokens.
The SEC said Ms Kardashian did not disclose that she was paid US$250,000 to post on her Instagram account about the tokens.
Ms Kardashian settled without admitting or denying the SEC allegations. And she agreed to refrain from touting any additional digital assets for three years.
US law requires anyone who touts a security, such as a stock or even some types of cryptocurrencies, to not only say they are getting paid to do so, but also to disclose the amount, the source, and the nature of those payments. BLOOMBERG
