On the heels of being defendant for his role in promoting the failed crypto exchange FTXGolden State Warriors star Stephen Curry is facing a new lawsuit for promoting the NFTs Bored Ape Yacht Club series. As in the FTX litigation, Curry’s role as promoter and investor could play a key role in determining his potential liability.
Last Friday, two investors who bought ApeCoin tokens sued Yuga Labs, the parent of the Bored Ape Yacht Club series, along with company executives, board members, and a group of promoters. investors expect Adonis Real et al. v. Yuga Labs, Inc. et al. be certified as a class action on behalf of everyone who purchased Yuga NFT tokens or ApeCoin between April 23, 2021 and now. The 95-page lawsuit, which was filed in federal court in Los Angeles, raises claims of unfair competition, unfair enrichment, violations of consumer law, aid and abetment, civil conspiracy and multiple violations of federal securities law. He is seeking a jury trial and at least $5 million in damages.
The list of “promoting defendants” is extensive. In addition to Curry, Madonna, Paris Hilton, Serena Williams, Justin Bieber, Snoop Dogg, DJ Khaled, Gwyneth Paltrow and Jimmy Fallon (among others) are named. They are described as promoters of companies that applied for the sale of Yuga securities to the public. The central issue, the complaint contends, is that Yuga Labs allegedly conspired with MoonPay, a company that facilitates the sale of digital assets, and another defendant to “discreetly pay their celebrity cohorts… without disclosing it to unsuspecting investors.”
The complaint suggests that Amy Wu, a board member of Ape DAO, who until November He directed FTX Ventures (FTX’s venture capital arm), “used its relationships on cryptocurrency exchange FTX to recruit defendant world champion athlete Curry to solicit sales of the BAYC collection of NFTs.” None of the BAYC NFTS “celebrity endorsements,” the complaint contends, “disclosed the underlying financial interests and relationships involved.” FTX Ventures was a investor at Yuga Labs.
On the February 18, 2022 complaint charges, Curry and an ice sculpture of a bored monkey appear in an FTX commercial. “Curry can be seen removing ice flakes from the distinctive features of the BAYC NFTs,” the complaint summarizes. The commercial reportedly appeared on FTX’s Twitter account with the teaser: “When you learn about crypto, you’ll be anything but bored.” The plaintiffs claim that they “saw the off-brand promotion” with Curry and “were induced to purchase and/or continue to hold Yuga securities as a result of this deceptive promotion.”
Curry’s involvement in an FTX ad posted to YouTube on March 29, 2022 is also described in the complaint as problematic. While the complaint acknowledges that the commercial was for FTX, not Yuga Labs, it argues that “there were multiple not-so-hidden references to BAYC’s collection of NFTs.” Those “references” include Curry working on an ice sculpture of an ape and the announcement “did not include any disclosure or disclaimer about the connection between FTX and Yuga through defendant Wu, who had a significant financial interest in both companies.” “. This arrangement, the complaint claims, misled “uninformed investors into investing in digital assets like BAYC NFTs, while at the same time giving a ‘wink’ disclaimer that this was not financial advice to give Curry a plausible deniability regarding his promotion of Yuga Financial Products.”
Bored Ape Yacht Club was one of the first notable NFT collections, as individual NFTs set records by selling for millions of dollars after their creation in April 2021. According to cryptoslam! According to the data, BAYC original items have accounted for more than $2.5 billion in all-time sales, not including spin-offs like the Mutant Ape Yacht Club and Bored Ape Kennel Club. The so-called Yugaverse also has its own cryptocurrency, ApeCoin. The token launched to much fanfare in March, but a drop in crypto values has reduced the coin’s trading value to roughly 50% of its initial price. Meanwhile, individual BAYC NFTs still regularly sell for over $80,000
What Sports previously reported, Curry’s fondness for the Bored Ape NFT is well documented. He reportedly paid $180,000 for unit No. 7990 of this NFT line. He then showed it off on Twitter and sent a selfie in the BAYC Discord chat.
Curry has also shown enthusiasm for various other crypto projects. He reportedly bought a Rumble Kong NFT for almost $30,000 and partnered with the company to launch a digital sneaker in conjunction with Under Armour. He also released his own set of 2,974 NFTs (acknowledging his status as the NBA 3-point record holder) on the FTX platform, with 100% of his proceeds reportedly going to a nonprofit based in Oakland. It is currently unclear how FTX bankruptcy it will ultimately affect NFT holders’ access to those items.
In a statement shared with Sportssister publication of , VarietyYuga Laboratories reprimanded the lawsuit as based on “opportunistic and parasitic” claims. The company, which will have the opportunity to respond to the lawsuit in a judicial file and request its dismissal, maintains that the case “has no merit.” Curry, like the 37 defendants, will also respond to the complaint, challenge the accuracy of the allegations and the alleged factual statements, and will profess his innocence.
One challenge for plaintiffs is that courts have been skeptical of lawsuits that try to hold spokespersons and patrons accountable for a company’s alleged wrongdoing. In a key case from 2014, the US Court of Appeals for the Ninth Circuit. ruled against the Federal Trade Commission, which argued that retired MLB player Steve Garvey was responsible for the misleading claims of a weight-loss supplement he endorsed. The court held that, in the absence of evidence, Garvey possessed “actual knowledge” of material misrepresentations or was “recklessly indifferent to the truth or falsehood of statements he made”, is not liable as an endorser.
One possible difference to celebrities promoting cryptocurrency-related products is that, in some cases, they are also investors. They may have greater access to company information than the average person and therefore could be seen as having a greater responsibility to protect the public from fraudulent or exploitative acts. On the other hand, if these celebrities lost money, it would suggest that they were not “in the know” and like others, they were victims.
The case has been assigned to judge Fernando Olguín. Attorney John Jasnoch of Scott+Scott Attorneys at Law in San Diego signed the complaint on behalf of the investors.
What Variety reportedA federal judge in Los Angeles threw out a case last week against Kim Kardashian, Floyd Mayweather and other famous backers of cryptocurrency company EthereumMax on the grounds that investors should “act reasonably before basing their bets on the zeitgeist.” .