Madonna, Justin Bieber and Gwyneth Paltrow among A-list celebrities sued over Bored Ape NFT endorsement

A host of A-list celebrities have been named in a class-action lawsuit against the creators of non-fungible token (NFT) firm Bored Ape Yacht Club, alleging the firm failed to disclose the celebrity’s alleged involvement in token promotion.

Madonna, Gwyneth Paltrow, and Justin Bieber are just a few of the big names the lawsuit alleges tricked their followers into buying these NFTs, which are essentially tokens of value used to secure ownership of unique items such as works of art.

The lawsuit adds that shareholders at Yuga Labs, the parent company of Bored Ape Yacht Club, tricked buyers into buying “lost investments at drastically inflated prices.”

NFTs have been around since late 2015 but may have reached mainstream popularity in 2021.

Jack Dorsey, the founder of Twitter, famously auctioned off his very first tweet as an NFT last year and it was bought with cryptocurrency for $2.9 million.

But many NFTs have fallen in value recently, with trading volume on Bored Ape’s NFTs down 93 percent from the peak at launch.

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Now the current lawsuit seeks monetary damages of at least $5 million on behalf of the plaintiffs and the alleged class of “everyone else in a similar position”.

It was filed in California federal court on Thursday, December 8, and read: “The truth is that the company’s entire business model relies on exploiting underhanded marketing and promotional activities by A-list celebrities who pay heavily without disclosure.” to increase demand for Yuga securities by convincing potential retail investors that the price of these digital assets would increase.”

Other people named in the lawsuit include Kevin Hart, Snoop Dogg, Serena Williams, Post Malone, The Weeknd, Jimmy Fallon’s production company Electric Hot Dog, Inc. and Universal Television.

The complaint alleges that most of the celebrities were recruited by talent manager Guy Oseary, formerly Madonna’s manager, who set up a plan with Yuga Labs to discreetly pay her for her endorsements on crypto firm Moonpay.

According to the complaint, Oseary’s venture capital firm, Sound Ventures, was an early investor in Moonpay.

Each of the famous defendants received digital assets from Moonpay or Yuga Labs for their endorsements, according to the lawsuit.

Justin Bieber, for example, received a Bored Ape NFT worth around $1.3 million when it was exhibited for an allegedly fraudulent post on Instagram claiming he bought it with his own money.

Meanwhile, on Jan. 20, Paltrow announced to investors that she had “joined” the Bored Ape community and thanked Moonpay for its services in facilitating the purchase. She also did not disclose that she has a financial interest in the company.