US District Judge Michael Fitzgerald has granted reality celebrity businesswoman Kim Kardashian and boxer Floyd Mayweather an apparent victory in a tentative court ruling that accused the celebrities of scamming cryptocurrency investors, specialist website Decrypt is reporting.

Both Kardashian and Mayweather were sued in January for allegedly making false and misleading statements while promoting the crypto token EthereumMax (EMAX).

Pump and dump

Kim Kardashian got into trouble in June 2021 after posting on Instagram to her then 228m followers “Are you guys into crypto? This is not financial advice but sharing what my friends told me about the ethereum max token!”

The crypto surged in value after the post but has since then crashed back to the same level as before the publicity, prompting accusation of a ‘pump and dump’. Investors claim they had paid “inflated prices”.

Judge Fitzgerald produced a written order on November 7 with a “tentative view” that lawyers defending EMAX tokens investors were “trying to act like” the Securities and Exchange Commission (SEC) but “haven’t chosen to view the tokens as a security”, Bloomberg reported. Judge Fitzgerald also added that the celebrities didn’t label the crypto tokens as a security.

A final written order will be issued later.

$1.26m penalty

Kim Kardashian was charged by the SEC earlier in October for failing to disclosure her own payment in the EMAX case, and agreed to pay $1.26m in penalties to settled the allegations. Kardashian did also agree not to promote any crypto asset securities for three years.

“This case is a reminder that, when celebrities or influencers endorse investment opportunities, including crypto asset securities, it doesn’t mean that those investment products are right for all investors,” SEC Chair Gary Gensler said then.