(Reuters) — A federal judge in California on Wednesday dismissed a lawsuit against reality TV star Kim Kardashian, boxing legend Floyd Mayweather Jr. and others because of their role in promoting a cryptocurrency, saying it wasn’t clear the investors suing actually saw promotions.
The lawsuit filed in January alleges that EthereumMax executives conspired with celebrity promoters to induce investors to buy EMax tokens, driving up the price and allowing them to sell their own tokens at a profit.
U.S. District Judge Michael Fitzgerald in Los Angeles said the investors can amend and modify their proposed class action.
The decision comes as other celebrity promoters face lawsuits from users of failed cryptocurrency exchange FTX, whose collapse has deepened an ongoing “crypto winter.”;
Sean Masson, an attorney representing the investors in the EthereumMax case, said they plan to revise their claims to add “a host of additional facts that demonstrate the defendants’ wrongdoing and liability.”
Michael Rhodes, the lead attorney for Ms. Kardashian, said the defense is “satisfied with the court’s well-reasoned decision.”
Mayweather’s lawyers did not immediately respond to a request for comment. The lawsuit also named former National Basketball Association star Paul Pierce.
Kardashian promoted EthereumMax in a June 2021 post on Instagram, and Mr. Mayweather wore the company’s logo on his boxer shorts during a widely viewed fight, the investors said.
In Wednesday’s ruling, Judge Fitzgerald said investors had failed to show that the managers and promoters planned to mislead investors, rather than acting in their own interests.
The investors’ fraud claims failed because they had not disclosed whether or when they saw the promotions, the judge wrote.
While the investors can revise those claims, Judge Fitzgerald permanently dismissed their claims under California’s Consumer Protection Act, which he said applies to tangible goods and services, not “intangible goods” like cryptocurrency.
Kardashian in October agreed to pay the SEC $1.26 million to settle claims that she failed to disclose that she was being paid to promote EthereumMax tokens. She pleaded not guilty.
The case is In Re: Ethereummax Investor Litigation, No. 22-00163.