The Weeknd, Justin Bieber, Madonna and others celebrities could find themselves in a severe bind, after the filing of a class action lawsuit that accuses them of promoting the purchase of NFTs and other financial assets to their followerswithout notifying them that they had a commercial relationship with the company that produces them.
In a relaxed way, the presenter of The Tonight ShowJimmy Fallon, used his television show in prime time as a showcase to show his collection of NFT ape illustrations to his audience, encouraging them to purchase a few copies.
The company that produces them, Bored Yacht Ape, is one of the subsidiaries of Yugo Labs, the defendant company. To this day, his NFT collection is one of the most popular in the world and each specimen of ape can be purchased from 68 ETH, or what is the same, 78,000 euros.
As reflected in the claim documents, the company used a third company, The Moon Pay, to do the financial operations. This has its own digital wallet platform to buy and store the assets and is the one that allegedly paid at celebrities for promoting NFTs.
The documents cite that “MoonPay is intended to be a storefront service designed to help the super-rich and celebrities to buy NFT, without the hassle of setting up a wallet, buying cryptocurrency, using it to buy an NFT, and then storing it.”
The message that celebrities conveyed to their audience was that being part of the Ape Yacht Club with the purchase of its assets was a simile of membership in an exclusive clubin which no one could enter.
This is precisely the message that the plaintiffs consider false and “totally fabricated” by one of the key figures in the alleged financial network, Guy Oseary, a Hollywood talent agent, as well as by executives from YugoLabs and MoonPay.
“Actually, the Executive Defendants and Oseary used their connections to MoonPay and their service as a covert way to compensate influencers sued for their NFT promotions without disclosing it to unsuspecting investors,” the lawsuit states.
“Yuga and Oseary executives together devised a plan to take advantage of their vast network of musicians, athletes and famous clients to promote Y deceitfully selling Yuga’s financial products“, the documents state.
The problem with celebrities promoting these assets, according to the lawsuit, is that they did so with an economic yield and covertlywithout informing his audience.
Likewise, the investors of Yugo Labs did not have this information and they did not know that the increasing rise in their assets was not due to real popularity, but to alleged influence peddling.
Plaintiffs Adonis Real and Adam Titcher are two such examples. As they claim in court documents, they have been investing in Yugo Labs NFT since April 2021.
In the complaint, they claim that “Billions of dollars” in sales and resales were generated through fabricated celebrity endorsements and deceptive promotionsand “at no time did any of the defendants register these securities with the United States Securities and Exchange Commission.”
Dozens of celebrities appear in the documents for their involvement in the “promotion and sale of a set of digital assets“. Among them are, Gwyneth Paltrow, Paris Hilton, Jimmy Fallon, Kevin Hart, DJ Khaled and Steph Curry.
For his part, Yugo Labs has denied Business Insider these assertions and states that “in our view, these claims are opportunistic and parasitic. We strongly believe they are without merit and look forward to proving it.”
Bored Ape, comprising more than 10,000 NFTs depicting cartoon monkeys in different outfits, is one of the most successful NFT art collectionsvalued at more than one billion euros.
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Justin Bieber, The Weeknd, Madonna and other celebrities appear in a lawsuit for fraud, after promoting NFT without counting that they charged for it
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