Jimmy FallonAnd the Ghouinith baltrow And the Justin Beiber They were sued in a proposed class action accusing them and a group of other celebrities of fraudulently promoting Bored Ape Yacht Club non-fungible tokens.
The lawsuit alleges that the celebrities misled their followers into buying BAYC NFTs, among other unregistered securities issued by Yuga Labs, to increase their value, causing buyers to purchase “losing investments at grossly inflated prices.”
“The fact is that the company’s entire business model is based on using nefarious marketing and promotional activities from highly compensated celebrities (without disclosing it), to drive demand for Yoga Securities by convincing potential retail investors that the price of these digital assets will appreciate.” That’s what the complaint filed Thursday in California federal court says.
The suit also has names MadonnaAnd the Kevin HartAnd the Stephen Curryand Snoop Dogg, Serena Williams, Post Malone, The Weeknd, and Fallons’ production company Electric Hot Dog, Inc. and Universal Television, among others. It claims most of them were recruited by talent manager Guy Oseary, who spearheaded a scheme with Yuga Labs to discreetly pay them for their endorsements through crypto company Moonpay. Oseary’s venture capital firm Sound Ventures was an early investor in Moonpay, according to the complaint.
Oseary is allegedly associated with several popular promoters, including Bieber, Paltrow, and Hart, through their early investments in Moonpay. By increasing demand for Apecoin cryptocurrency tokens for BAYC NFTs and Yuga Labs, the lawsuit claims it has also increased demand for Moonpay.
“Oseary, MoonPay Defendants, and Promotor Defendants all shared a strong motive to use their influence to create artificial demand for Yuga Securities, which in turn would increase the use of MoonPay’s crypto payment service to handle this new demand,” the complaint says. . At the same time, Oseary could also use MoonPay to disguise how he pays his celebrity followers for direct or off-label promotions of Yuga financial products.
in a loop The Tonight Show On November 11, 2021, Fallon promoted Moonpay and BAYC NFT Group by announcing that he had acquired his first NFT through the crypto company, which bills itself as a white glove service designed to help celebrities buy digital assets. He did not disclose that he has a financial stake in Moonpay.
Neither Electric Hot Dog nor Universal disclosed that this alleged organic segment on the Tonight Show was actually a paid advertisement for BAYC’s collection of NFTs and MoonPay by two celebrities (Fallon and Winkelman) who are business partners with an investor (Oseary) in both Yuga. and MoonPay, attorney John Jasnoch wrote in the complaint.
The lawsuit, named by Oseary and Yuga Labs, says the promotion convinced investors to buy BAYC NFTs.
According to the lawsuit, each of the defendant promoters received digital assets from Moonpay or Yuga Labs for their endorsement. For example, Bieber BAYC received an NFT worth approximately $1.3 million when it was made to an allegedly fraudulent Instagram post stating he bought it with his own money. Paltrow similarly announced to investors on January 26 that it had “joined” the BAYC community and thanked Moonpay for its services in facilitating the purchase. Nor did she disclose that she has a financial stake in the company.
Trading volume of BAYC NFTs is down 93 percent from its peak at launch. Similarly, the value of ApeCoin tokens has fallen by 90% from its all-time high.
“In our view, these claims are opportunistic and parasitic,” a Yuga Labs spokesperson said in a statement. “We firmly believe that they are unmeritorious, and we look forward to proving that.”
Fallon, Bieber, Paltrow, Universal and Moonbay did not respond to requests for comment.
Famous cryptocurrency promoters including Kim Kardashian, Larry David, and Tom Brady have been named in similar lawsuits alleging fraud over their endorsements. On Wednesday, a federal judge Lawsuit dismissed against proponents of the EthereumMax cryptocurrency accusing them of fraudulently misleading their followers into buying EMAX tokens only to sell their stakes once their value has inflated. While he said the case raises “legitimate concerns” about the ability of celebrities to persuade unprivileged followers to buy “snake oil with unprecedented ease and access,” US District Judge Michael Fitzgerald found that there was an expectation that “investors would act sensibly before basing bets on the zeitgeist.” “.
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