A class action lawsuit alleges that stakeholders of Yuga Labs, the parent company of the NFT series Bored Ape Yacht Club and its affiliated digital products, engaged in a conspiracy with celebrities to defraud potential investors.
In the lawsuit, filed Dec. 8 in federal district court in Los Angeles, Yuga’s partners — including veteran music manager Guy Oseary — are named among 37 defendants, including Kevin Hart, Gwyneth Paltrow, Madonna, Justin Bieber, Serena Williams, Jimmy Fallon, Paris Hilton, Snoop Dogg, The Weeknd, Post Malone and NBA star Steph Curry. Also named is Amy Wu, who recently left struggling cryptocurrency exchange FTX and served as a consultant and board member for ApeDAO.
The lawsuit seeks monetary damages of at least $5 million on behalf of the plaintiffs and the putative “everyone else in the same situation” class.
Achieved by Variety, a Yuga Labs spokesperson said, “In our view, these claims are opportunistic and parasitic. We firmly believe they are without merit and we are eager to prove it.
Plaintiffs Adonis Real and Adam Titcher claim that by promoting or endorsing the Bored Ape community through social media and other media, these artists and athletes caused the value of non-fungible tokens (NFTs) to skyrocket to ” artificially inflated and distorted prices” and engaged in deceptive promotions that do not disclose alleged financial compensation. The two also allege the “scheme” involved MoonPay, which facilitated transfers of ownership to named celebrities, some of whom supported the service. One such named investor is Fallon, whose on-air name verification of MoonPay as “the PayPal of crypto” on a November 11, 2021 episode featuring Mike Winkelmann, the digital artist known as from Beeple, is quoted, as is a Jan. 24, 2022, appearance on Hilton’s “The Tonight Show.”
Another big promo piece came via an FTX teaser ad featuring Steph Curry sculpting an ice sculpture of a bored monkey with the tagline, “When you learn about crypto, you’ll be anything but bored.” .”
The complaint states that there are over 103,000 unique account holders of Yuga titles – which includes Bored Ape’s Mutant Ape Club; the “Otherside” metaverse, which offered virtual land sales; and the ApeCoin token – from which Yuga receives a 2.5% royalty rate “every time one of its NFTs is resold on the secondary market”.
The period specified in the class action is from April 24, 2021 to present. At the height of his wallet in early 2022, Bored Ape NFTs were fetching hundreds of thousands of dollars with features deemed rare. Plaintiff Titcher purchased a Mutant Ape and an Otherdeed for the Bored Ape Otherside metaverse, and Real purchased ApeCoin tokens, according to the lawsuit.
Investing in NFTs is not without risk, especially since trading in these assets remains unregulated. The crypto crash that started in early summer and got another big hit in November with the collapse of FTX also affected the market. A class action lawsuit filed Nov. 15 accused FTX’s “brand ambassador” celebrities, including Larry David, Tom Brady, Giselle Bündchen, Shaquille O’Neal and Steph Curry, of deceptively encouraging consumers to invest in the company.
The lawsuit against Yuga Labs and others was filed in the U.S. District Court for the Central District of California, Western Division. The case is file number. 2:22-CV-08909-FMO-PLA. Plaintiffs are represented by San Diego law firm Scott & Scott, who made public his intention to file a class action lawsuit in July. In November, the firm also targeted, via a series of “investigation alerts”, Warner Music Group, Live Nation, Beyond Meat and Poshmark, among others, for breach of fiduciary duties.
Last week, a class action lawsuit against Kim Kardashian, Floyd Mayweather and other celebrity EthereumMax promoters was dismissed by a federal judge. According to a CNBC report, Judge Michael Fitzgerald of the Central District of California noted in his dismissal: “While the law certainly imposes limits on these advertisers, it also expects investors to act reasonably before basing their paris on the spirit of the moment”.
#Kevin #Hart #Jimmy #Fallon #Madonna #named #class #action #lawsuit #alleging #fraud #scheme #Bored #Ape #Yacht #Club #NFT