U.S. District Judge Stanley Blumenfeld Jr. of the Central District of California granted in part the defendants’ motion to dismiss the Second Amended Complaint in Naeem Azad et al. v. Caitlyn Jenner et al. (Case No. 2:24-cv-09768) on April 16, 2026. A separate final judgment was entered the same day, effectively closing the federal proceeding.
The decision was flagged by Coinbase Chief Legal Officer Paul Grewal in a post on X, where he called it a rejection of “a core tenet of the previous @SECGov’s attack on crypto” and noted the ruling drew barely any reaction despite its significance. The ruling’s central line, that “promotion alone, however, does not establish a common enterprise absent pooling or a structure linking investor fortunes,” has quickly become the most cited passage in crypto legal circles this week.
What the Court decided
The case hinged on the Howey Test, the Supreme Court framework established in SEC v. W.J. Howey Co. (1946), which requires an investment of money in a common enterprise with an expectation of profits derived from the efforts of others for an asset to qualify as an investment contract.
Judge Blumenfeld ruled that lead plaintiff Lee Greenfield failed to satisfy the common enterprise prong. The court found the complaint did not plausibly allege that JENNER buyers pooled resources or agreed to share profits and losses beyond simply purchasing the token. Having concluded the common-enterprise element was not satisfied, the court did not reach the question of whether purchasers had a reasonable expectation of profits derived from Jenner’s efforts.
Federal securities claims were dismissed with prejudice as to Greenfield, meaning they cannot be refiled in federal court. The judge also denied the plaintiff’s request to file a third amended complaint. California state law claims for common-law fraud and quasi-contract were dismissed without prejudice after the court declined to exercise supplemental jurisdiction, leaving the door open for those to be refiled in state court.
The court’s order is available through the official docket on Justia and CourtListener.
Background of the case
The original class action was filed by the Rosen Law Firm in November 2024 on behalf of purchasers of the JENNER token. Jenner launched the cryptocurrency on Solana on May 26, 2024, through the Pump.fun launchpad, and later migrated a version of the token to the Ethereum blockchain. The token’s market capitalization peaked at roughly $7.5 million in June 2024 before collapsing to near-zero.
Plaintiffs argued that Jenner leveraged her celebrity profile to promote the token across social media, including posts on X featuring AI-generated imagery of Jenner in a “JENNER ETH” shirt. They contended her public influence created a reasonable expectation of profit sufficient to satisfy the Howey framework.
The court had previously dismissed the initial complaint on May 9, 2025, finding the plaintiffs, many of whom were foreign investors, failed to adequately allege U.S.-based transactions. The amended complaint added Greenfield, a U.K. citizen who claimed losses exceeding $40,000, as lead plaintiff.
In the revised filing, plaintiffs argued that investors had pooled resources because Jenner stated a 3% transaction fee would fund token buybacks, marketing, political donations to Donald Trump’s presidential campaign, and fractional ownership rights tied to her Olympic gold medal. Judge Blumenfeld rejected the pooling theory, noting that the gold medal ownership plan was announced in August 2024, after Greenfield had made his purchases, and was never carried out. The court found the proposed uses lacked a clear structural link to investor returns.
Jenner’s legal team maintained throughout the litigation that the token was not a security, describing it as “a humorous cryptocurrency on the Ethereum blockchain, intended solely for entertainment purposes.” Co-defendant Sophia Hutchins, Jenner’s then-business manager, died in July 2025 during the pendency of the case. Jenner had previously called the lawsuit meritless and set up a legal defense fund, citing potential consequences for the wider digital asset industry if the plaintiffs prevailed.
Why the ruling matters
The decision adds to a growing body of case law distinguishing speculative memecoins from regulated securities. It aligns with the SEC’s February 27, 2025, staff statement concluding that typical memecoins do not involve the offer and sale of securities, and with the Commission’s more recent interpretive release treating memecoins as digital collectibles rather than investment contracts.
While Judge Blumenfeld’s ruling is not binding on the SEC or on other federal courts, legal teams defending celebrity-backed tokens now have a concrete district court opinion applying Howey to reject a common-enterprise theory built on celebrity promotion and promised transaction-fee uses. The ruling may influence litigation involving other celebrity and politically linked tokens currently working their way through the courts.
The case also illustrates the wider ambiguity around celebrity memecoins, which has been a recurring theme across the industry. The HAWK memecoin controversy involving Haliey Welch raised similar Howey-test questions, while recent policy disputes such as the Senate probe into SEC enforcement of Trump-linked crypto deals continue to shape the regulatory debate.
No appeal has been reported as of publication. The federal proceeding is closed, but Greenfield retains the option to refile his common-law fraud and quasi-contract claims in California state court.
This is a developing story. Follow The Crypto Times on Google News for updates.
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