July 27, 2022
By Murtuza Merchant
Yuga Labs, the creator of Ape Coin and the Bored Ape Yacht Club non-fungible tokens (NFTs) has been threatened with a class action lawsuit by renowned law firm Scott+Scott, for allegedly inappropriately inducing users to buy its products and using celebrities to pump up the prices of its offerings.
Leadership used celebrities to inflate prices of products
In an announcement shared with the media, Scott+Scott claimed that the leadership team of Yuga Labs used celebrity promoters and endorsements to inflate the price of the company’s NFTs and tokens and that unsuspecting investors were coaxed into buying the company’s products after being promised high returns and strong growth prospects.
“After selling off millions of dollars of fraudulently promoted NFTs, YUGA LABS launched the Ape Coin to further fleece investors. Once it was revealed that the touted growth was entirely dependent on continued promotion (as opposed to actual utility or underlying technology) retail investors were left with tokens that had lost over 87% from the inflated price high on April 28, 2022,” Scott+Scott alleged.
Investors coming forward to sue the company
It further added that individual investors who have suffered losses are coming together to seek restitution for their losses through the purchase of NFTs and Ape Coin tokens, through a class action lawsuit against the $4 billion company.
The prominent law firm also asked investors, who had suffered losses to come forward and seek legal help.
When asked to give a comment on the allegations by this reporter, the management of Yuga Labs maintained a stoic silence.
Notably, Yuga Labs had recently sued Ryder Ripps, a prominent artist for copyright infringement, and claimed that he was scamming buyers into buying identical NFTs and that it was a “deliberate effort to harm Yuga Labs at the expense of consumers.”
Yuga Labs had referred to the artist as “a self-proclaimed ‘conceptual artist” in the lawsuit, which claimed that he created an identical NFT collection of BAYC images he did not purchase.
About the author
Murtuza Merchant is a senior journalist and an avid follower of blockchain and cryptocurrencies.