The lawsuits keep coming for Yuga Labs. The latest is a class action against the Bored Ape Yacht Club creators for using A-list celebrities to promote their creations. They are accused of using these influential figures to mislead their followers by shilling “losing investments at drastically inflated prices.”
An excerpt of the complaint filed on December 8 in California federal court reads,
“The truth is that the company’s entire business model relies on using insidious marketing and promotional activities from A-list celebrities that are highly compensated (without disclosing such), to increase demand of the Yuga securities by convincing potential retail investors that the price of these digital assets would appreciate.”
Celebrities mentioned in the suit include Jimmy Fallon, Gwyneth Paltrow, and Justin Beiber. Other notable names include Madonna, Kevin Hart, Stephen Curry, Snoop Dogg, Serena Williams, Post Malone, The Weeknd, and many others.
Yuga Labs’ Elaborate Scheme
According to the suit, most of these individuals were recruited by Guy Oseary, a talent manager with ties to Yuga Labs. He is believed to have colluded with the company to discreetly pay the celebrities for their endorsements. The payments were made through Moonpay, a crypto company in which Oseary’s venture capital firm Sound Ventures was an early investor.
The promotions had a ripple effect. By raising the status of Yuga Labs’ creations, the demand for Moonpay also went up.
“Oseary, the MoonPay Defendants, and the Promotor Defendants each shared the strong motive to use their influence to artificially create demand for the Yuga securities, which in turn would increase use of MoonPay’s crypto payment service to handle this new demand. At the same time, Oseary could also use MoonPay to obscure how he paid off his celebrity cohorts for their direct or off-label promotions of Yuga Financial Products.”
There has been a lot of discontent within the crypto community since crypto prices crashed. Yuga Labs has borne most of the bad bile after its creations lost a significant amount of their value, leaving a bad taste in the mouths of their investors.
Yuga Labs is behind popular creations such as Bored Yacht Club and ApeCoin, which have lost almost 90% of their value.