A host of celebrities, as well as Adidas and Yuga Labs, the creators of the Bored Ape Yacht Club NFTs are being sued in a class action lawsuit alleging that celebrities’ promotion of the NFTs broke the law.
Two plaintiffs, Adam Titcher of California, who purchased a Bored Ape Yacht Club (BAYC) NFT, and Adonis Real of Florida, who purchased ApeCoin cryptocurrency tokens, are seeking damages worth in excess of US$5 million (AU$7.4 million).
The plaintiffs are alleging that the celebrities and the creators of the NFTs did not disclose “the nature, source, and amount of any compensation paid, directly or indirectly, by the company in exchange for the endorsement.”
They also allege that the company needed a way to discreetly pay its celebrity endorsers in order to make their promotion of the NFTs seem organic. As a result, the NFTs were artificially inflated in value seeing the defendants make “hundreds of millions of dollars” while Joe Public investors were left with NFTs worth “a fraction of their artificially inflated value.”
The class action lawsuit said that, in order to get in touch with the celebs, Yuga Labs hatched a “vast scheme” with “highly connected Hollywood talent agent” Guy Oseary and “front operation” MoonPay to leverage the network of “musicians, athletes, and celebrity clients” to misleadingly promote and sell the NFTs.
Moonpay “purports to be a white-glove service designed to help the super-rich and celebrities buy NFTs ‘without all the hassle of setting up a wallet, buying crypto, using that crypto to purchase an NFT and then taking custody.'”
In reality, the plaintiffs allege that used their connections to Moonpay and its service as a “covert way to compensate” the celebs for their promotion of the NFTs “without disclosing it to unsuspecting investors”.
The whole affair memorably came to a head when Paris Hilton and Jimmy Fallon had an incredibly awkward conversation on the latter’s talk show about their newly purchased BAYC NFTs.
A spokesperson for Yuga Labs called the claims “opportunistic and parasitic. We strongly believe that they are without merit and look forward to proving as much.”
Representatives for MoonPay and Guy Oseary did not immediately respond to requests for comment.
