A class action lawsuit claims that interested parties at Yuga Labs, the parent company of the NFT series Bored Monkey Yacht Club and its affiliated digital products, involved in a conspiracy with celebrities to defraud potential investors.
In the lawsuit, filed December 8 in Los Angeles federal district court, Yuga’s partners, including veteran music manager oseary boy — are named among the 37 defendants, which include kevin hartGwyneth Paltrow, VirginJustin Bieber, Serena Williams, jimmy fallon, Paris Hilton, Snoop Dogg, The Weeknd, Post Malone and NBA star Steph Curry. Also named is Amy Wu, who recently exited troubled cryptocurrency exchange FTX and served as a consultant and board member for ApeDAO.
The lawsuit seeks money damages of at least $5 million on behalf of the plaintiffs and the putative class of “all others similarly situated.”
Reached for VarietyA Yuga Labs spokesperson said: “From our point of view, these claims are opportunistic and parasitic. We firmly believe they are without merit and hope to prove it.”
Plaintiffs Adonis Real and Adam Titcher claim that by promoting or endorsing the Bored Ape community through social media and other means, these artists and athletes caused the value of non-fungible tokens (NFTs) to skyrocket “artificially inflated and distorted” and engaged in deceptive promotions that did not reveal alleged financial compensation. The two also allege that the “scheme” involved MoonPay, which facilitated property transfers to named celebrities, some of whom endorsed the service. One such investor is Fallon, whose on-air name verification of MoonPay as “the PayPal of cryptocurrency” in a Nov. 11, 2021 episode with Mike Winkelmann, the digital artist known as Beeple, is cited, as is a january. January 24, 2022, appearance on Hilton’s “The Tonight Show.”
Another prominent piece of the promotion came via an FTX teaser commercial that featured Steph Curry carving an ice sculpture of a bored monkey with the tagline: “When you learn about crypto, you’ll be anything but bored.”
The complaint states that there are more than 103,000 unique account holders of Yuga securities, which include Bored Ape’s offshoot, the Mutant Ape Club; the “Otherside” metaverse, which offered virtual land sales; and the ApeCoin token, from which Yuga receives a 2.5% royalty rate “every time one of his NFTs is resold on the secondary market.”
The period specified in the class action lawsuit is from April 24, 2021 to the present. At the height of his portfolio in early 2022, Bored Ape’s NFTs were selling for hundreds of thousands of dollars with what were considered rare features. Plaintiff Titcher bought a Mutant Ape and an Otherdeed for the Bored Ape Otherside metaverse, and Real bought ApeCoin tokens, according to the lawsuit.
Investing in NFTs is not without risk, especially since trading in such assets remains unregulated. Also affecting the market is the cryptocurrency crash that began in early summer and saw another hit in November with the collapse of FTX. A class action lawsuit filed on November 15 charged Famous FTX “Brand Ambassadors” including Larry David, Tom Brady, Giselle Bündchen, Shaquille O’Neal and Steph Curry of misleadingly encouraging consumers to invest in the company.
The lawsuit against Yuga Labs et al. was filed in the US District Court for the Central District of California, Western Division. The case is file no. 2:22-CV-08909-FMO-PLA.