December 14, 2022
By Anjali Kochhar
A class-action lawsuit contends that stakeholders in Yuga Labs, the parent company of NFT series Bored Ape Yacht Club and its affiliated digital products, engaged in a conspiracy with celebrities to defraud potential investors.
In the complaint, filed Dec. 8 in federal district court in L.A., Yuga partners — including veteran music manager Guy Oseary — are named among the 37 defendants, who include Kevin Hart, Gwyneth Paltrow, Madonna, Justin Bieber, Serena Williams, Jimmy Fallon, Paris Hilton, Snoop Dogg, The Weeknd, Post Malone and NBA star Steph Curry.
Amy Wu, who recently exited troubled cyptocurrency exchange FTX and served as a consultant and board member of the ApeDAO, has also been named in the suit.
The lawsuit seeks monetary damages of at least $5 million on behalf of the plaintiffs and the putative class of “all others similarly situated.”
Plaintiffs Adonis Real and Adam Titcher claim that in promoting or endorsing the Bored Ape community through social media and other mediums, these entertainers and athletes caused the value of non-fungible tokens (NFTs) to balloon to “artificially inflated and distorted prices” and engaged in misleading promotions that did not disclose alleged financial compensation.
Another prominent piece of promotion came by way of an FTX teaser commercial featuring Steph Curry carving an ice sculpture of a Bored Ape with the tagline, “When learning about crypto, you’ll be anything but bored.”
The complaint states that there exist more than 103,000 unique account holders of Yuga securities — which includes the Bored Ape offshoot Mutant Ape Club; the metaverse “Otherside,” which offered virtual land sales; and the token ApeCoin — of which Yuga receives a 2.5% royalty rate “every time one of its NFTs is resold on the secondary market.”
The lawsuit against Yuga Labs and others was filed in the U.S. District Court for the Central District of California, Western Division. The case is docket no.
The plaintiffs are represented by San Diego firm Scott & Scott, which went public with its intention to form a class action in July.
In November, the firm also targeted, via a series of “investigation alerts,” Warner Music Group, Live Nation, Beyond Meat and Poshmark, among others, for breach of fiduciary duties.
Last week, a class action lawsuit against Kim Kardashian, Floyd Mayweather and other celebrity promoters of EthereumMax, was dismissed by a federal judge.
About the author
Anjali Kochhar covers cryptocurrency stories in India as well as globally. Having been in the field of media and journalism for over three years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.