A lawsuit against Kim Kardashian and Floyd Mayweather has been dismissed by a US judge.
The reality star and the former boxing pro had been accused of misleading fans and investors by promoting a cryptocurrency on social media.
Investors who bought EthereumMax tokens said they had lost money after believing what the celebrities said about the digital asset.
In a ruling on Wednesday, district Judge Michael Fitzgerald of California said that the case raised “legitimate concerns” about the ability of celebrities to persuade fans to “buy snake oil with unprecedented ease and reach”.
But the law still expected investors to “act reasonably” before acting “on the zeitgeist of the moment”, he added.
Kim posted about the cryptocurrency on Instagram in June last year, writing at the time:Â “Are you guys into crypto??? This is not financial advice but sharing what my friends told me about Ethereum Max token.”
The SKIMS founder’s post included “#ad” at the bottom, indicating she had been sponsored, but it did not disclose her $250,000 payment from EthereumMax.
Floyd promoted the EMAX tokens at a boxing match and at a Bitcoin conference in June 2021.
The value of the EMAX tokens rocketed in 2021 – but by January, they had lost 97% of their value.
The defendants in the case also included Steve Gentile and Giovanni Perone, the co-founders of EthereumMax, and Justin French – a consultant and developer for the cryptocurrency.
The judge’s ruling said: “This action demonstrates that just about anyone with the technical skills and/or connections can mint a new currency and create their own digital market overnight.”
“Likewise, the action emphasises the power of social media in allowing celebrities to directly communicate with their millions of fans with a touch of a button.
“These two facts, together, have seemingly allowed unvetted and highly volatile investment ventures to go viral based solely on the paid-for word of celebrity promoters.”
“Losses have inevitably followed. The court acknowledges that this action raises legitimate concerns over celebrities’ ability to readily persuade millions of undiscerning followers to buy snake oil with unprecedented ease and reach.”
“But, while the law certainly places limits on those advertisers, it also expects investors to act reasonably before basing their bets on the zeitgeist of the moment.”
Kim’s lawyer Michael Rhodes told NBC: “We’re pleased with the court’s well-reasoned decision on the case.”
The investors can refile the lawsuit if they amend some of their claims by December 22.
The ruling comes two months after Kim agreed to pay $1.26 million (€1.29 million) and not to promote cryptocurrency for three years to settle claims by the US Securities and Exchange Commission for her failure to disclose the $250,000 payment she received.
