Yuga Labs and Celebrities Dragged in Endorsement Lawsuit

Developers of Bored Ape Non-fungible tokens (NFTs) and Mutant Ape Yuga Labs, together with MoonPay have all been dragged into a lawsuit.

A California-based law firm Scott+Scott has filed a class action suit against Yuga Labs, MoonPay, and many other companies for allegedly taking part in a scheme where A-list celebrities were contacted to promote the Yuga NFT collections. 

The lawsuit has been filed in a United States District Court’s Central District of California. Based on the filed document, Yuga Labs and Israeli-American talent manager Guy Harley Oseary connived to utilize their “vast network of A-list musicians, athletes, and celebrity clients and associates to misleadingly promote and sell the Yuga Financial Products.” This was with the Bored Ape Yacht Club (BAYC) NFTs.

Yuga Labs made payments to these celebrities secretly for them to endorse its NFTs via MoonPay.

On his part, Oseary who is already an investor in MoonPay encouraged the celebrities in his network to endorse the said collections. A few of the celebrities that have been dragged into this lawsuit are Snoop Dogg, Jimmy Fallon, Kevin Hart, Steph Curry, Justin Bieber, Gwyneth Paltrow, Lil Baby, Kevin Hart, and Paris Hilton.

The promotions made by all of these celebrities was able to “artificially increase the interest in and price of the BAYC NFTs during the Relevant Period, causing investors to purchase these losing investments at drastically inflated prices.”

Yuga Labs Denies Claims in Lawsuit

Like Yuga Labs and MoonPay, these celebrities are also defendants in the lawsuit.

Expressly speaking, this action is an infringement of both state and federal laws as it involves the violation of consumer protection laws and securities regulation. For most of the defendants, their only offense was a failure to disclose their relationship with Yuga Labs. Altogether, the lawsuit encompasses 10 charges. 

In response, Yuga Labs has denied the allegations laid against it by the lawsuit claiming that it was “opportunistic and parasitic” without any merits. Amidst this, Yuga Labs is still under investigation by the United States Securities and Exchange Commission (SEC) for dealing in unregistered securities.

Two months ago, renowned American media personality Kim Kardashian also faced a lawsuit for promoting a crypto token offered by EthereumMax (EMAX). Eventually, she was made to pay $1.26 million in fines, disgorgement, and interest.