Yuga Labs, creators of Bored Ape Yacht Club (BAYC) and crypto fintech Moonpay, are facing a class action lawsuit over alleged celebrity use to misleadingly advertise and sell Nonfungible Tokens (NFTs).
Over 40 people and companies are named as defendants in the lawsuit, including Paris Hilton, Snoop Dog, Jimmy Fallon, Justin Bieber, Madonna, Serena Williams, Post Malone and Diplo. The class action lawsuit was filed Dec. 8 by John T. Jasnoch of Scott+Scott Attorneys at Law LLP in the Central District of California, alleging that the crypto companies used their Hollywood network to promote the digital assets without complying with disclosure requirements . The document states:
“This case embodies those concerns as it involves a massive scheme between a blockchain startup, Yuga Labs, Inc. (“Yuga”), a highly connected Hollywood talent agent (defendant Guy Oseary), and a frontline operation (MoonPay) acts. , who have all come together to promote and sell a range of digital assets.”
According to the lawsuit, executives at Yuga Labs and Oseary created a plan to leverage a vast network of top-notch musicians, athletes and celebrity clients to give investors a perception that through Yuga’s flagship NFT collection, they are “joining the club.” “.
“The exclusivity of BAYC membership was based entirely on the involvement and endorsement of highly influential celebrities. But this alleged interest in and endorsement of the BAYC-NFTs by high-profile trendsetters was manufactured entirely by Oseary at the behest of the Executive Defendants,” the suit alleges.
Related: Yuga Labs acquires Beeple’s 10KTF game, hints at Metaverse integration
The two plaintiffs in the Adonis Real and Adam Titcher case purchased NFT collections from Yuga Labs between April 2021 to date. The class action lawsuit also references an earlier statement by the United States Securities and Exchange Commission (SEC) regarding celebrity endorsements, alleging that “these endorsements may be unlawful if they affect the nature, source, and amount of any compensation paid, directly or indirectly.” not disclose by the company in exchange for confirmation.”
As Cointelegraph reported, the class-action lawsuit was first proposed in July, when the law firm Scott+Scott alleged that Yuga Labs used celebrity endorsements to “inflate the price” of BAYC NFTs and the APE (APE) token to try to identify injured investors.
Yuga Labs is also part of a broader probe into the NFT market by US regulators. Reports show that the SEC is investigating Yuga Labs on whether certain NFTs “are more like stocks” and whether their sale violates federal law.
Yuga Labs and Moonpay did not immediately respond to Cointelegraphs requests for comment.
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