Class-action lawsuit alleging NFT advertisement featuring celebrities

Yuga Labs, the company behind Bored Ape Yacht Club (BAYC) and crypto-fintech Moonpay is facing a class action lawsuit for allegedly using celebrities to deceptively promote and sell NFTs.

More than 40 people and companies are named as defendants, including Paris Hilton, Snoop Dog, Jimmy Fallon, Justin Bieber, Madonna, Serena Williams, Post Malone and Diplo. The class action lawsuit was filed Dec. 8 in a California court by John T. Jasnoch of Scott+Scott Attorneys at Law LLP. He alleges that crypto companies used their Hollywood network to promote digital assets without complying with disclosure regulations. The document states:

“This case is a prime example of these concerns, as the scheme involved a blockchain startup, namely Yuga Labs, Inc. (“Yuga”), a Hollywood talent broker (defendant Guy Oseary) and a front company (MoonPay ) involved, who have come together to promote and sell a range of digital assets.”

According to the lawsuit, the leaders of Yuga Labs and Oseary devised a plan to leverage a vast network of top musicians, athletes and celebrity clients, giving investors the impression that through Yuga’s NFT collection, they were “club joined”.

“The exclusivity of BAYC membership was solely based on the inclusion of highly influential celebrities who promoted it. But this alleged interest and promotion of BAYC NFTs by high profile influencers was exposed by Oseary at the request of the accused fabricated by the company, “It said.

The two plaintiffs in this case, namely Adonis Real and Adam Titcher, acquired the NFT collections from Yuga Labs between April 2021 and present. The class action lawsuit also refers to a statement by the United States Securities and Exchange Commission regarding celebrity advertising. The statement states that “this announcement may be unlawful if it does not disclose the nature, source and amount paid, directly or indirectly, by the company in consideration for the announcement”.

A Yuga Labs spokesperson told Cointelegraph that “the allegations are opportunistic and parasitic. We strongly believe they are unfounded and are eager to prove them.”

As Cointelegraph reported, the class action lawsuit was first proposed in July, when law firm Scott + Scott alleged that Yuga Labs used celebrity advertisers to inflate the price of BAYC-NFTs and the token. APE (APE). The law firm then attempted to find aggrieved investors.

Yuga Labs is also being investigated as part of a broader probe into the NFT market by US regulators. The U.S. Securities and Exchange Commission is investigating Yuga Labs, seeking an answer to whether certain NFTs look “more like stocks” and whether selling them violates federal law.

Leave a Comment