Venable attorneys Melissa Steinman and Chris Boone published “Celebrities Promoting Cryptocurrencies Become Class Action Targets” in the March 2022 issue of The Licensing Journal. The following is an excerpt:
A recent class action lawsuit filed against Kim Kardashian, Floyd Mayweather, and former professional basketball player Paul Pierce earlier this month underscores the need for celebrity endorsers to take care when they approach any endorsement activity in the cryptocurrency space.
The lawsuit alleges that the celebrities collaborated with Ethereum Max, a company offering ERC-20 cryptocurrency tokens (EMAX Tokens), and its executives to engage in a “pump and dump” scheme promoting investments in the company’s tokens. The complaint alleges that the three celebrity influencers misleadingly promoted EMAX Tokens to potential investors, touting the ability of investors to make significant returns due to the favorable “tokenomics” of the EMAX Tokens, when in fact the tokens were practically worthless. The class action alleges violations of California’s Unfair Competition Law, California’s Consumers Legal Remedies Act, aiding and abetting, and unjust enrichment/restitution.