Yuga Labs class action lawsuit drags celebrities over alleged misrepresentation | CPT PPP Coverage
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Yuga Labs class action lawsuit drags celebrities over alleged misrepresentation appeared on coingeek.com by CoinGeek.
Disgruntled investors in Yuga Labs’ Bored Ape Yacht Club (BAYC) non-fungible tokens (NFTs) and Apecoin have launched a class-action lawsuit against the project’s founder and a string of celebrities.
According to the filing document, the lawsuit alleges that BAYC digital collectibles were “misleadingly promoted” using celebrities to bait investors. Brought forward by John T. Jasnoch, attorney at Scott+Scott Attorneys at Law LLP, the lawsuit likens NFTs to securities, raising further concerns about whether the sales of the digital collectibles violated U.S. securities law.
At the heart of the suit is the claim that using celebrity endorsements in promoting BAYC collectibles is unlawful because “they do not disclose the nature, source, and amount of any compensation paid, directly or indirectly.” The lawsuit alleges that Yuga Labs and Hollywood talent agent Guy Oseary used their network of A-list musicians and athletes to promote BAYC NFTs.
“The exclusiveness of BAYC membership was entirely based on the inclusion and endorsements of highly influential celebrities. But this purported interest in, and endorsement of, the BAYC NFTs by high-profile tastemakers was entirely manufactured by Oseary at the behest of the Executive Defendants,” the filing read.
A total of 37 defendants were named in the suit, including celebrities like Serena Williams, Snoop Dogg, Steph Curry, DJ Khaled, Kevin Hart, Justin Beiber, Paris Hilton, and Madonna. Others include digital artist Beeple, Reddit’s co-founder Alexis Ohanian, and MoonPay CEO Ivan Soto-Wright.
Yuga Labs, in a statement, described the lawsuit as simply “opportunistic and parasitic,” maintaining its innocence of any wrongdoing.
“We strongly believe that they are without merit and look forward to proving as much,” Yuga Labs stated.
Scott+Scott knee deep in the fight against celebrity endorsements
Scott+Scott attorneys have been active in the industry, waging war against the scourge of celebrity endorsements. The firm was involved in the class-action lawsuit against Kim Kardashian, Floyd Mayweather, and Paul Pierce for promoting the dubious EthereumMax (EMAX) project that cost investors millions of dollars in losses.
However, the court threw out the case on the grounds that investors are expected to carry out their due diligence before sinking funds in any project instead of blindly following celebrity recommendations. Despite the setback, Scott+Scott says it will be tweaking its claims and will make another filing to the court.
“We were disappointed in the dismissal,” Jasnoch said. “But the judge gave us leave to amend the complaint and gave us a bit of a road map to get a claim sustained. And he also said that the case raised important issues regarding celebrity promotion of crypto tokens.”
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