Jimmy Fallon, Gwyneth Paltrow and Justin Bieber have been sued in a proposed class-action lawsuit accusing them and a number of other celebrities of promoting Bored Ape Yacht Club’s unsanitary fraud symptoms.
The lawsuit alleges that the celebrities directed their followers to buy BAYC NFTs, including unregistered securities issued by Yuga Labs, causing buyers to “lose investments at grossly inflated prices” in order to increase their value.
“The truth is that the Company’s entire business model uses the insidious marketing and promotional activities of highly paid (without disclosing) A-list celebrities to increase demand for Yuga securities by persuading potential retail investors. digital assets will be appreciated,” the complaint, filed Thursday in California federal court, said.
Madonna, Kevin Hart, Stephen Curry, Snoop Dogg, Serena Williams, Post Malone, The Weeknd, Fallon’s production company Electric Hot Dog, Inc. in costume. and Universal Television and others are also named. It claims most of them were recruited by talent manager Guy Oseary, who led a scheme with Yuga Labs to discreetly pay them through cryptocurrency firm Moonpay. Oseary’s venture capital firm, Sound Ventures, was an early investor in Moonpay, according to the complaint.
Oseary’s early investments in Moonpay are said to have ties to several high-profile promoters, including Bieber, Paltrow and Hart. By driving demand for BAYC’s NFTs and Yuga Labs’ Apecoin crypto-tokens, the lawsuit alleges that they also drive demand for Moonpay.
“Oseary, the MoonPay Defendants, and the Promoter Defendants each shared a strong motive to use their influence to artificially create demand for Yuga securities, which in turn would increase the use of MoonPay’s cryptocurrency payment service to satisfy this new demand,” the complaint states. it is said. . “At the same time, Oseary may use MoonPay to disguise how Yuga Financial Products pays its celebrity cohorts for direct or off-label advertising.”
In one episode The Tonight Show On November 11, 2021, Fallon announced the acquisition of the first NFT through the crypto firm, which is billed as a white glove service designed to help celebrities buy digital assets, introducing Moonpay and the BAYC NFT collection. He did not disclose his financial stake in Moonpay.
“Neither Electric Hot Dog nor Universal disclosed that this purportedly organic segment on the Tonight Show was actually a paid advertisement for the BAYC NFTs and MoonPay collection by two celebrities (Fallon and Winkelmann) who were business partners with the investor (Oseary). Both Yuga , as well as MoonPay,” attorney John Jasnoch wrote in the complaint.
The suit, named after Oseary and Yuga Labs, said the incentive convinced investors to buy BAYC NFTs.
Each of the promoter defendants allegedly received digital assets from Moonpay or Yuga Labs for their endorsements. For example, Bieber received approximately $1.3 million worth of BAYC NFTs due to a fraudulent Instagram post claiming to have purchased it with his own money. Paltrow similarly announced to investors on January 26 that she had “joined” the BAYC community and thanked Moonpay for its services in facilitating the purchase. He also did not disclose his financial stake in the company.
Trading volume of BAYC NFTs has fallen by 93 percent since launch. Similarly, the value of ApeCoin tokens has fallen 90 percent from its all-time high.
“We believe these claims are opportunistic and parasitic,” said a Yuga Labs spokesperson. “We believe they are without merit, and we look forward to proving most of them.”
Fallon, Bieber, Paltrow, Universal and Moonpay did not respond to requests for comment.
Celebrity promoters of the cryptocurrency, including Kim Kardashian, Larry David and Tom Brady, have been named in similar lawsuits alleging fraud over their endorsements. A federal judge on Wednesday dismissed a lawsuit against the backers of cryptocurrency EthereumMax, accusing them of defrauding their followers into selling their EMAX tokens only after the value was inflated. While he said the case raised “legitimate concerns” about the ability of celebrities to persuade unsuspecting followers to buy “snake oil with unprecedented ease and accessibility,” U.S. District Judge Michael Fitzgerald found that “investors must act reasonably before basing their decisions.” there is an expectation for bets on the zeitgeist of the moment.”