Adidas, Paris Hilton and More Celebrities Sued Over ‘Misleading’ Bored Ape NFT Promotions

Adidas and a host of celebrities, including Paris Hilton, Stephen Curry and Serena Williams, have been named in a class-action lawsuit over their sponsorship of Yuga Labs digital currencies and NFTs, including its flagship NFT collection Bored Ape Yacht Club (BAYC).

The lawsuit, filed Thursday in U.S. District Court for the Central District of California, represents investors interested in purchasing Yuga NFTs and its native token ApeCoin between March 23 and April 23. 8th, 2022. The lawsuit seeks more than $5 million for the affected class.

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To lure investors, Yuga allegedly used celebrities to “misleadingly promote” its NFTs, making these celebrity promotions appear organic and unpaid. Yuga also misrepresented its growth prospects, financial ownership and financial benefits to investors, according to the lawsuit.

“In our view, these claims are opportunistic and parasitic,” a Yuga Labs spokesperson told FN. “We firmly believe they are unfounded and look forward to proving it.”

Regarding Adidas, the lawsuit alleges that the sportswear company acted as “agent and direct or indirect spokesperson” for Yuga, given its equity investment in the company, and authorized “the solicitation of Yuga securities to the public.” Last December, Adidas released its first NFT collection in collaboration with Bored Ape Yacht Club.

FN has reached out to Adidas for comment, as have others named in the lawsuit.

These promotions helped “artificially inflate interest in and price of BAYC NFTs,” the lawsuit alleged, leading investors to buy these assets at “drastically inflated prices.”

The story goes on

ApeCoin hit a new low of $2.70 per token in November, marking a 90% drop from its peak when investors bought the coin. The NFT collection, including BAYC, also fell in value dramatically.

“The company is presenting the Bored Ape ecosystem as a brand organically loved by some of the world’s most famous celebrities,” the lawsuit reads. “But the truth is that the company’s entire business model relies on using underhanded marketing and promotional activities by A-list celebrities who are highly paid (without disclosing this) to increase demand for the Yuga securities by potential retail investors would appreciate the price of these digital assets and that, as members of the ‘club’, these investors would have exclusive access to additional financial products and benefits.”

In October, Kim Kardashian encountered a similar legal issue with the Securities and Exchange Commission after posting about a crypto-asset security without saying she received payment to promote it. Kardashian was ordered to pay $1.26 million in penalties, disgorgement and interest for a settlement to settle the charges, the SEC said.

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