These are serious allegations.
The other shoe, as they say, has fallen. A class action lawsuit filed last week alleges that Yuga Labs — the company behind the hugely expensive, influential Bored Ape Yacht Club NFT collection — conspired to inflate the value of BAYC digital assets through a series of secret celebrity endorsements. a number of state and federal laws in the process.
The list of defendants in the Yuga Labs case, which totals a whopping 37, makes the class action case against defunct crypto exchange FTX and its famous underwriters look almost like little potatoes.
Among the many celebrity names are pop star Justin Bieber; rapper Calvin “Snoop Dogg” Broadus Jr.; candle maker Gwyneth Paltrow; hitmaker Khaled Mohammad “DJ Khaled” Khaled; Madonna; tennis star Serena Williams and her husband, Reddit founder Alexis Ohanian; socialite Paris Hilton; basketball player Wardell Stephen “Steph” Curry II (who was also named in the FTX case); comedian Kevin Hart; Alexander Pall and Andrew Taggart, the duo behind The Chainsmokers; night menace James “Jimmy” Fallon, and much more. Corporate entities including Universal Television and Adidas are also mentioned.
The allegations are serious. According to the lawsuit, the conspiracy was the brainchild of Yuga Labs and Guy Oseary, longtime manager of Madonna and an early investor in a crypto payment system called MoonPay. That payment system, prosecutors allege, was used to funnel secret payments to a very long list of A-list celebrities who, without disclosing their financial ties to Yuga Labs, promoted BAYC assets on television and social media as if they were just fans of the digital artwork – not paid promoters with a vested financial interest in the volatile asset.
“Yuga, a highly connected Hollywood talent agent (defendant Guy Oseary) and a front operation (MoonPay), who have all banded together to promote and sell a range of digital assets,” the indictment reads, further claiming that they “work together devised a plan to use their vast network of A-list musicians, athletes and celebrity clients and associates to deceptively promote and sell the Yuga Financial Products.
This conspiracy between the executing defendants and Oseary was then carried out with the assistance of the [celebrity promoters] and the MoonPay defendants, raking in millions for all of them,” it continues. “Meanwhile, investors were left with staggering losses.”
This lawsuit follows another filed against Yuga in August by the same firm, Scott + Scott. In that filing, the company accused Yuga of artificially inflating the value of their NFTs in addition to the price of ApeCoin, the outfit’s proprietary crypto token, both of which, according to the plaintiffs, are in reality unregistered securities.
The new lawsuit reiterates these previous allegations and additionally argues that with the arrival and promotion of ApeCoin, Yuga “has completely dropped the artifice of the NFT and taken a more direct path to making money: they created their own out of nothing.”
Yuga, for his part, has vehemently denied the allegations, really only claiming they were fabricated.
“In our opinion, these claims are opportunistic and parasitic,” said a company spokesperson Decrypt. “We are convinced they are unfounded and look forward to proving it.”
Things like this will likely take a long time to unfold, and whether the plaintiffs can prove the scope of the conspiracy remains to be seen. Either way, the allegations are striking.
Sure, FTX commercials from crypto days are absolutely hair-raising, but at least they were clearly paid promotions. Paris Hilton and Jimmy Fallon soullessly discuss their alleged passion for NFTs on-air, with no mention of financial ties to Yuga, or some of the celebs mentioned happily sporting their BAYCs on their posts Twitter feeds without explicit warning that they were paid for it, is — if true — treacherous. There’s a reason celebrities and influencers are forced to put “#ad” on their posts. And while they may not lose too much from their own BAYC investments, real people have and will.
At best, it’s careless. But at worst, it’s downright heartless.
READ MORE: Lawsuit Alleges Yuga Labs Conspired With Celebrities Like Justin Bieber To Push Bored Ape NFTs [Decrypt]
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