A number of celebrities, including Justin Beiber, Paris Hilton, Jimmy Fallon, and Madonna, were involved in a court case involving popular metaverse coins and Yuga Labs behind the NFT project. Yuga Labs’ non-fungiable token (NFT) collections were allegedly “misleadingly advertised”. Thus, celebrities came to the fore with the lawsuit filed by the defendants on the grounds of material damage. Here are the details…
Lawsuit filed for metaverse coin APE and NFTs
The lawsuit was filed in the US District Court for the Central District of California by John T. Jasnoch, Attorney at Law LLP, Scott+Scott. The lawsuit, filed Thursday, was raised on behalf of “investors” who have purchased Yuga Labs NFTs, including Bored Ape Yacht Club. So BAYC NFT collections and ApeCoin (APE) came into question. In the ecosystem, which has been active since April of last year, two plaintiffs, Adam Titcher of California and Adonis Real of Florida, acquired Yuga Labs assets around this time.
Titcher purchased Mutant Ape Yacht Club #1984 for 5.3 ETH (about $17,000 at the time) in August 2021. In April, OpenSea printed Otherdeed for Otherside #16235, while Adonis bought an undisclosed amount of ApeCoin on Coinbase. According to the document, both investors purchased the assets “relied on misleading promotions” by Yuga Labs and celebrities. As a result, this resulted in “investment losses”.
SEC was investigating Yuga Labs
The document shows that the U.S. Securities and Exchange Commission has been investigating Yuga Labs since March. He repeatedly refers to NFTs as securities in this document. So, as we reported on Cryptokoin.com, in October Bloomberg reported that the SEC is investigating Yuga Labs to determine whether the sale of crypto assets violates federal law.
The lawsuit also states that Yuga Labs and Web3 investor Guy Oseary were involved in “a grand scheme.” It claims to use the crypto payment platform MoonPay as a “pre-operation” to promote and sell crypto assets. “The executives at Yuga and Oseary have jointly devised a plan to leverage their extensive network of famous musicians, athletes, and celebrity clients and partners to falsely promote and sell Yuga Financial Products,” the lawsuit states. In total, 37 defendants are involved in the case, including Yuga Labs’ founders and leadership team. So, the defendants are as follows:
- MoonPay and its CEO Ivan Soto-Wright
- Alexis Ohanian, co-founder and investor of Reddit
- NFT artist Beeple
- Ape DAO board members Amy Wu, Maaria Bajwa, and Dean Steinbeck
- Guy Oseary
- Justin Beiber
- Jimmy Fallon
- Gwyneth Paltrow
- Madonna
- Paris Hilton
- Serena Williams
- Post Malone
- Snoop Dogg
- Kevin Hart
- Steph Curry
- The Weeknd
- DJ Khaled
- adidas
Lawyer: People involved in investment should be held accountable
Further, the lawsuit alleges that BAYC and related NFTs “rely heavily on the perception that ‘joining the club’ … confers status on investors and gives BAYC holders access to exclusive events, benefits and other lucrative investment opportunities.” Apart from that, according to the lawsuit, “The exclusivity of BAYC membership was based entirely on the inclusion and endorsement of influential celebrities.”
“The sale of crypto assets like NFTs, like any other financial product, comes with disclosure,” Jasnoch said. “DAO, get famous; “People involved in misleading investments should be held accountable,” he added. He added that celebrity endorsements “create fear of missing out on endless Bored Ape and ApeCoin promotions.
Meanwhile, this isn’t the first time Scott+Scott lawyers have attempted to wage war on celebrity endorsements in the crypto space. The law firm was also behind the proposed class action lawsuit against celebrities like Kim Kardashian and Floyd Mayweather for promoting the EthereumMax cryptocurrency on social media. However, as we reported, this case was dropped.
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