- The firm behind Bored Ape Yacht Club NFTs is being sued for failing to disclose celebrity involvement.
- The lawsuit alleged that Yuga Labs manufactured celebrity endorsements and misleading promotions.
- Celebrities mentioned include Justin Bieber, Serena Williams, Madonna and Gwyneth Paltrow.
A class action lawsuit has been filed against Yugo Labs, the company behind Bored Ape Yacht Club, on behalf of investors who claim it failed to disclose the alleged involvement of celebrities in the promotion and sale of NFTs, court documents show.
The lawsuit alleged that stars including Justin Bieber, Serena Williams and Madonna misleadingly promoted Bored Ape.
The legal action against blockchain cryptocurrency startup Yuga Labs was filed in California District Court on Friday.
Plaintiffs Adonis Real and Adam Titcher have been investing in YugoLabs NFTs since April 2021, according to the court documents.
The complaint alleged that “billions of dollars” in sales and resales were generated through manufactured celebrity endorsements and misleading promotions, and “at no point did any of the defendants register these securities with the SEC.”
Dozens of other celebrities are named as defendants in the suit for their involvement in “promoting and selling a range of digital assets,” the court documents state, including Gwyneth Paltrow, Paris Hilton, Jimmy Fallon, Kevin Hart, DJ Khaled and Steph Curry.
The unique selling point of Yuga Labs’ NFT collection, called the Bored Ape Yacht Club, is that NFT owners become members of an exclusive “club” that includes these celebrities.
The exclusivity, according to the lawsuit, was “entirely fabricated” by Guy Oseary, a Hollywood talent agent, YugoLabs executives, and a front operation “MoonPay,” to promote and sell digital assets. MoonPay is a platform that facilitates the purchase and sale of cryptocurrencies.
The documents also cited that “MoonPay purports to be a white-glove service designed to help the super-rich and famous buy NFTs ‘without all the hassle of setting up a wallet, buying crypto, using that crypto to buy an NFT, and then supervise it.”
“In fact, the Executive Defendants and Oseary used their connections to MoonPay and its service as a covert means of compensating the Promoter Defendants for their promotions of the BAYC NFTs without disclosing it to unsuspecting investors,” according to the lawsuit.
“The executives at Yuga and Oseary jointly devised a plan to utilize their vast network of A-list musicians, athletes, and celebrity clients and associates to deceptively promote and sell the Yuga Financial Products,” the documents state.
Consisting of over 10,000 NFTs depicting cartoon monkeys wearing various outfits, Bored Ape is one of the most successful NFT art collections, valued at over $1 billion.
Yuga Labs did not immediately respond to a request for comment from Insider.