Author : Mark
Date : Dec 11,2022
The complaint names more than 40 parties as defendants, including Paris Hilton, Snoop Dog, Jimmy Fallon, Justin Bieber, and Madonna.
A class-action complaint has been filed against Yuga Labs, the company behind the Bored Ape Yacht Club (BAYC) and the cryptocurrency fintech Moonpay, for allegedly utilizing celebrities to falsely advertise and market nonfungible tokens (NFTs).
In the case, more than 40 parties—including Paris Hilton, Snoop Dog, Jimmy Fallon, Justin Bieber, Madonna, Serena Williams, Post Malone, and Diplo—are listed as defendants. According to the class-action lawsuit, which was brought on December 8 in the Central District of California by John T. Jasnoch of Scott+Scott Attorneys at Law LLP, the cryptocurrency companies leveraged their Hollywood connections to promote the digital assets without making the required disclosures. The report claims:
“This case epitomizes these concerns as it involves a vast scheme between a blockchain start-up company, Yuga Labs, Inc. (‘Yuga’), a highly connected Hollywood talent agent (Defendant Guy Oseary), and a front operation (MoonPay), who all united for the purpose of promoting and selling a suite of digital assets.”
The lawsuit claims that Yuga Labs and Oseary executives devised a strategy to take advantage of their extensive network of A-list sportsmen, musicians, and celebrity customers in order to give investors the impression that they were "joining the club" by purchasing Yuga's bestselling NFT line.
"The inclusion and support of extremely powerful celebrities served as the sole foundation for the exclusivity of BAYC membership. But the lawsuit claims that this alleged interest in and endorsement of the BAYC NFTs by well-known tastemakers was totally created by Oseary at the direction of the Executive Defendants.
Adonis Real and Adam Titcher, the two plaintiffs in the case, bought collections from Yuga Labs NFTs between April 2021 and the present. Additionally, the class action makes reference to a previous Securities and Exchange Commission (SEC) statement that stated celebrity endorsements "may be unlawful if they do not disclose the nature, source, and amount of any compensation paid, directly or indirectly, by the company in exchange for the endorsement."
According to a Yuga Labs spokesman, the "claims are parasitic and opportunistic. We are eager to demonstrate our conviction that they are without merit.
The class-action lawsuit was first put up in July, according to Cointelegraph, when the legal firm Scott+Scott alleged Yuga Labs utilized celebrity endorsements to "inflate the price" of the BAYC NFTs and the APE token in an effort to find investors who had been affected.
Additionally, Yuga Labs is a subject of a broader investigation by US regulators into the NFT business.
According to reports, the SEC is looking into Yuga Labs to determine whether some NFTs are "more analogous to stocks" and whether selling them is against the law.