The plaintiffs involved in the EthereumMax (EMAX) investor class action lawsuit have been granted a final opportunity to amend their claims against the celebrities they accuse of promoting the now-defunct cryptocurrency. This decision was made by United States District Court Judge Michael Fitzgerald in an order issued on October 3rd.
The class-action lawsuit was initially filed against prominent figures such as boxer Floyd Mayweather, NBA star Paul Pierce, and reality TV star Kim Kardashian in 2022. The plaintiffs alleged that these celebrities promoted EMAX, which they referred to as a “pump and dump” scheme. However, the lawsuit was dismissed by the judge last year. Nevertheless, in June of this year, Judge Fitzgerald revived the case and allowed the plaintiff’s claims of “unfair competition” against the celebrities to proceed.
In the recent court order, four motions were addressed. Mayweather’s motion to dismiss the state consumer law claims was denied by the court, as the plaintiffs were deemed to have sufficiently alleged materiality and Mayweather’s failure to disclose that he was a paid promoter. Similarly, Pierce’s motion to dismiss the state consumer law claims and manipulation claim was also denied. The court found that there was enough evidence to suggest that Pierce or his agent benefitted from selling and trading EMAX tokens.
One of EMAX’s co-founders, Giovanni Perone, also filed motions to dismiss the consumer claims but was only partially successful. The court granted the dismissal of the securities claims against Perone, as the plaintiffs failed to provide evidence that he personally sold tokens. However, the court denied the motion to dismiss the consumer claims, indicating that they must be amended.
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As a result of this order, the plaintiffs are required to re-file their complaint, while the defendants must address the remaining claims. Judge Fitzgerald emphasized that this is the final opportunity for the plaintiffs to address the deficiencies identified by the court.
It is worth noting that EthereumMax is not associated with the popular cryptocurrency Ethereum. According to its whitepaper, EthereumMax positioned itself as a “culture token” that aimed to bridge the gap between community tokens and established cryptocurrencies. However, in October 2022, the U.S. Securities and Exchange Commission charged Kim Kardashian with unlawfully promoting EMAX as a security. Kardashian agreed to pay $1.26 million in penalties to settle the charges.
Overall, the recent court order in the EthereumMax investor class action lawsuit provides the plaintiffs with their last chance to amend their claims against the celebrities accused of promoting the cryptocurrency. Meanwhile, the defendants will have to address the remaining claims filed against them. The outcome of this case will have significant implications for both the plaintiffs and the celebrities involved in the promotion of EMAX.
