The plaintiffs of the EthereumMax (EMAX) investor class-action lawsuit have been given a final chance to amend their claims against the celebrities they accuse of promoting the now-defunct cryptocurrency.
In an Oct. 3 court order, United States district court Judge Michael Fitzgerald said he’s giving the EMAX investors a third and final chance to submit an amended complaint.
The class-action suit was brought against boxer Floyd Mayweather, NBA star Paul Pierce, reality TV star Kim Kardashian and others in 2022 for allegedly promoting EMAX, which the suit called a “pump and dump” scheme.
The judge dismissed the suit in 2022 but revived it again in June, refusing to throw out the plaintiff’s “unfair competition” claims against the celebrities. Four motions were dealt with in the new order.
The court denied Mayweather’s motion to dismiss the state consumer law claims, finding the plaintiffs sufficiently alleged materiality and Mayweather’s failure to disclose that he was a paid promoter.
It also denied Pierce’s motion to dismiss the state consumer law claims and manipulation claim, finding it was sufficiently alleged that Pierce or his agent sold and traded tokens for his benefit.
The court denied one of EMAX co-founders, Giovanni Perone’s, motions to dismiss the same consumer claims but granted amended dismissal of the securities claims for failing to allege Perone personally sold tokens.
The court said that the plaintiffs must re-file the complaint, and the defendants must answer the remaining claims. Fitzgerald states:
“Plaintiffs have repeatedly failed to cure the deficiencies identified by the Court and were explicitly warned that this would be their last opportunity to amend.”
According to its white paper, EthereumMax — which is not related to Ethereum — claimed to be a “culture token” that “bridges the gap between the emergence of community tokens and the well-known foundational coins of crypto.”
In October 2022, the U.S. Securities and Exchange Commission charged Kim Kardashian for unlawfully promoting the token as a security. She agreed to pay $1.26 million in penalties for her involvement.