According to the class action lawsuit, Yuga Labs and Bored Ape Yacht Club executives failed to disclose their connections to celebrities promoting the NFT project, violating state and federal laws.
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After a series of investigations into Yuga Labs. Scott+Scott law firm filed lawsuit in the U.S. District Court’s Central District of California:
The complaint alleges that Defendants violated provisions of the Exchange Act by making false and misleading statements concerning Yuga’s growth prospects, financial ownership, and financial benefits for Yuga securities investors, as well as using celebrity promotors to lure in unsuspecting investors so that Yuga insiders could sell the unregistered Yuga securities in violation of the Securities Act.
The lawsuit named 37 co-defendants who vary from executives to celebrities, including Guy Oseary, Justin Bieber, James Fellon, and Paris Hilton. It also mentions the crypto-payment app MonnPay that allegedly facilitated these endorsements.
According to the 100 pages filing, Real Et Al v. Yuga Labs Inc, Yuga Labs engaged in a conspiracy by boosting Bored Ape Yacht Club prices by secretly paying celebrities. At the same time, they were enriching everyone involved through a covert payment scheme laundered through a well-known cryptocurrency company.
Scott+Scott stresses:
On November 13, 2022, the price of the ApeCoin Token hit a low of $2.70 per token, an approximately 90% drop from its height during the Class Period, which it has not been able to recover.
On November 14, 2022 the floor price of the Company’s NFT collections including the BAYC, Mutant Ape Yacht Club, and Otherdeed virtual land fell to similar Class Period lows.
Yuga Labs denies all allegations:
In our view, these claims are opportunistic and parasitic. We strongly believe that they are without merit, and look forward to proving as much.
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