A group of four investors who participated in the popular NFT assortment, Bored Ape Yacht Club (BAYC), have initiated a class action lawsuit against the project’s developer, Yuga Labs, along with 29 other entities. The lawsuit alleges misleading promotion of the collectibles, which has coincided with a substantial drop in their market values.
According to a report from CNN, the lawsuit lists various additional defendants, including prominent names such as art auction powerhouse Sotheby’s Holdings, sportswear titan Adidas, cryptocurrency payments company MoonPay, as well as public figures like Canadian musician Justin Bieber and American media personality Paris Hilton.
Specifically, the plaintiffs claim that Sotheby’s collaborated with Yuga Labs to artificially inflate the prices of BAYC NFTs. They highlight Sotheby’s 2021 sale of 100 collectibles to a single purchaser for over $24 million as misleading, asserting that Yuga Labs orchestrated this collaboration to generate heightened excitement and investor engagement in the collection.
Conversely, Bieber and Hilton are accused of endorsing BAYC without disclosing their financial involvement in the project. Allegedly, Hilton’s representatives feigned interest in the collectibles for financial gain.
Adidas is purportedly implicated in a scheme to artificially inflate NFT prices, while MoonPay faces accusations of market manipulation. The plaintiffs contend that Yuga Labs clandestinely used MoonPay to compensate their “celebrity associates,” thus giving the impression that the interest in the BAYC collection was organic rather than a product of paid promotions.
Refutations and Repercussions
In response to the legal action, a representative for Yuga Labs dismissed the allegations as lacking factual basis or merit. The spokesperson characterized the lawsuit, which is an amended version of a complaint initially lodged in December, as “opportunistic,” akin to its precursor. The spokesperson underlined Yuga Labs’ role in fostering innovative communities that have spurred global enthusiasm and creativity within the media and technology realm.
Sotheby’s countered the allegations in the lawsuit, asserting that they are groundless and reaffirming the company’s intention to mount a defense in the legal proceedings.
The plaintiffs are seeking a jury trial and damages exceeding $5 million.
Meanwhile, the values of BAYC NFTs, which surged during the 2021 NFT fervor, have experienced a significant decline over the past year. Presently, the collection’s floor price stands at 25 ether ($42,700), marking a decline of more than 66% compared to a year ago, according to CoinGecko data.
