Yuga Labs, creators of Bored Ape Yacht Club (BAYC) and crypto fintech Moonpay, are facing a class action lawsuit for allegedly using celebrities to misleadly promote and sell non-perishable tokens (NFTs).
More than 40 people and companies are named as defendants in the lawsuit, including Paris Hilton, Snoop Dogg, Jimmy Fallon, Justin Bieber, Madonna, Serena Williams, Post Malone, and Diplo. The class action lawsuit was filed on December 8 by John T. The document states:
This case sums up those concerns as it involves a broad scheme between a blockchain startup, Yuga Labs, Inc. (“Yuga”), a Hollywood talent agent (defendant Guy Oseary), and a front-end operation (MoonPay), who have all united with the purpose of Promotion and sale of a range of digital assets.
According to the lawsuit, Yuga Labs and Oseary executives hatched a plan to tap into a vast network of A-list musicians, athletes, and celebrities, with the goal of bringing the perception of “joining the club” to investors through Yuga’s flagship NFT pool.
“The exclusiveness of BAYC’s membership was based entirely on the inclusion and endorsement of highly influential celebrities. But this alleged interest in and endorsement of BAYC NFTs by high-profile tastemakers was entirely manufactured by Oseary at the behest of the executive defendants.”, the suit claims.
Related: Yuga Labs Acquires Beeple’s 10KTF Game, Hints At Metaverse Integration
The plaintiffs in Adonis Real and Adam Titcher purchased clusters of Yuga Labs NFTs between April 2021 to the present. The class action also cites an earlier SEC statement about celebrity endorsements, claiming that “these endorsements may be illegal if you do not disclose the nature, source, and amount of any compensation paid, directly or indirectly, by the company for the endorsement.” “.
As Cointelegraph reported, the class action lawsuit was first proposed in July, when law firm Scott + Scott alleged that Yuga Labs used celebrity endorsements to “inflate the price” of BAYC token NFTs and APE (APE) in an effort to identify affected investors.
Yuga Labs is also part of a broader investigation into the NFT market by US regulators. Reports show that the SEC is investigating Yuga Labs on whether some NFTs are “closer to stock” and whether selling them violates federal laws.
Yuga Labs and Moonpay did not immediately respond to Cointelegraphs’ requests for comment.
