Celebrities Sued in Class Action Lawsuit Over Promoting NFT Collection
by FARUK IMAMOVIC | VIEW 639
Yuga Labs, the creator of the Bored Ape Yacht Club (BAYC) Nft collection, has been sued in a class action lawsuit along with a number of celebrities who endorsed the collection. The suit, filed in California, accuses Yuga Labs of a conspiracy in which celebrities were paid to promote the Bored Ape Yacht Club's NFT collection without disclosing the payments, thereby artificially inflating the price of the NFTs.
The plaintiffs' lawyers argue that the defendants' promotional campaign was extremely successful, generating billions of dollars in sales and resales. However, they claim that at no time did any of the defendants report these payments to the Securities Commission.
The lawsuit alleges that the defendants' actions violated federal and state laws, and seeks damages and penalties on behalf of investors who purchased BAYC NFTs.
Celebrities in trouble
Celebrities named in the lawsuit include Justin Bieber, Snoop Dogg, Serena Williams, Madonna, The Weeknd, Kevin Hart, DJ Khaled, Gwyneth Paltrow, Paris Hilton, Jimmy Fallon, and Steph Curry.
Music manager Guy Osery, a partner of Yuga Labs, is also mentioned in the lawsuit. “Defendants’ promotional campaign was wildly successful, generating billions of dollars in sales and re-sales,” official court documents state.
“The manufactured celebrity endorsements and misleading promotions … were able to artificially increase the interest in and price of the BAYC NFTs…, causing investors to purchase these losing investments at drastically inflated prices”.
This is not the first time that celebrities have been accused of promoting NFTs without disclosing their financial interests. In April, the Securities and Exchange Commission (SEC) issued a warning to celebrities and other influencers who promote NFTs, reminding them of their obligations to disclose any compensation they receive for their endorsements.
The lawsuit against Yuga Labs and the celebrities highlights the potential legal risks associated with the NFT market, which has exploded in popularity in recent months. While NFTs have been hailed as a revolutionary technology that allows for the creation of unique, digital assets, the market has also been plagued by fraud, counterfeiting, and other issues.
As the lawsuit against Yuga Labs and the celebrities proceeds, it will be interesting to see how the case is resolved and whether it has any impact on the wider NFT market.