Jimmy Fallon, Gwyneth Paltrow, and Justin Bieber are all being sued in a proposed class action accusing them and other celebrities that promoted Bored Ape Yacht Club non-fungible tokens of fraud. The suit also claims that celebrities misled followers into buying the NFTs, amongst other unregistered securities that were issued by Yuga Labs, in order to increase their value, causing buyers to purchase “losing investments at drastically inflated prices.”
The complaint reads, “The truth is that the Company’s entire business model relies on using insidious marketing and promotional activities from A-list celebrities that are highly compensated (without disclosing such), to increase demand of the Yuga securities by convincing potential retail investors that the price of these digital assets would appreciate.”
Other names included in the suit are Madonna, Kevin Hart, Stephen Curry, Snoop Dogg, Serena Williams, Post Malone, The Weeknd, Fallons’ production company Electric Hot Dog, Inc. and Universal Television, among others. It goes on to say that most of the celebrities were recruited via Guy Oseary, who headed the scheme with Yuga Labs to discreetly pay them for endorsements through the crypto firm Moonpay. Oseary’s venture capital firm Sound ventures was an early investor in Moonpay.
The complaints continues to read, “Oseary, the MoonPay Defendants, and the Promotor Defendants each shared the strong motive to use their influence to artificially create demand for the Yuga securities, which in turn would increase use of MoonPay’s crypto payment service to handle this new demand, At the same time, Oseary could also use MoonPay to obscure how he paid off his celebrity cohorts for their direct or off-label promotions of the Yuga Financial Products.”
The suit says the promotion convinced investors to buy BAYC NFTs. With each of the promoter defendants receiving digital assets from Moonpay or Yuga Labs for their endorsements. Bieber, Paltrow and others never disclosed that they were given the NFTs and never purchased them with their own funds. The trading volume of BAYC NFTs has dropped 93 percent from its peak and ApeCoin tokens dropped 90 percent from its own all time high.
Yuga labs stated that, “In our view, these claims are opportunistic and parasitic, We strongly believe that they are without merit, and look forward to proving as much.”
—
Kathy Hutchins / shutterstock.com