Yuga Labs, creators of Bored Ape Yacht Club (BAYC) and Moonpay cryptocurrency technology are against a class action for allegedly using celebrities to promote and sell non-fungible tokens (NFTs) in a deceptive manner.
More than 40 individuals 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 on Dec. 8 by John T. Jasnoch of Scott+Scott Attorneys at Law LLP in the Central District of California and claims that crypto companies used their Hollywood network to promote digital assets without complying with disclosure requirements. . The document says:
โThis case epitomizes these concerns, as it involves a grand scheme between a blockchain start-up company, Yuga Labs, Inc. (โYugaโ), a highly connected Hollywood talent agent (defendant Guy Oseary) and an operation front companies (MoonPay), who came together for the purpose of promoting and selling a set of digital assets."
According to the lawsuit, executives at Yuga Labs and Oseary created a plan to tap into a broad network of A-list celebrity musicians, athletes, and clients, with the goal of bringing the perception of "joining the club" to investors through Yuga's flagship NFT collection.
"The exclusivity 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 fabricated by Oseary a instances of the Executive Defendants.", alleges the lawsuit.
Related: Yuga Labs Acquires Beeple's 10KTF Game, Hints At Metaverse Integration
The two plaintiffs in the case, Adonis Real and Adam Titcher, purchased Yuga Labs' NFT collections between April 2021 and the present. The class action lawsuit also refers to an earlier statement by the United States Securities and Exchange Commission (SEC) on celebrity endorsements, alleging that "these endorsements may be illegal if they fail to disclose the nature, the source and amount of any compensation paid, directly or indirectly". , by the company in exchange for the guarantee".
What reported by CointelegraphThe class action lawsuit was first proposed in July, when the law firm Scott+Scott claimed that Yuga Labs used celebrity endorsements to "inflate the price" of BAYC NFTs and APEs. (BOW) token, trying to identify aggrieved investors.
Yuga Labs is also part of a broader investigation into the NFT market by US regulators. Reports show the SEC is investigating Yuga Labs about 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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