Adidas, celebs sued over ‘misleading’ Bored Ape NFT campaigns – Footwear News
Adidas and a number of celebrities including Paris Hilton, Stephen Curry and Serena Williams have been named in a class action lawsuit over their promotion of digital currencies and NFTs from Yuga Labs, including the flagship NFT collection Bored Ape Yacht Club (BAYC).
The suit, filed Thursday in the US District Court for the Central District of California, represents investors who were affected by buying Yuga NFTs and its native token, ApeCoin, between April 23, 2021, through December. 8, 2022. The lawsuit seeks more than $5 million for the affected class.
To lure investors, Yuga allegedly used celebrities to “misleadingly promote” its NFTs, making these celebrity promotions appear organic and unpaid. According to the lawsuit, Yuga also misrepresented its growth prospects, financial ownership and financial benefits to investors.
“In our view, these claims are opportunistic and parasitic,” a Yuga Labs spokesperson told the UN. “We strongly believe they are without merit and look forward to proving as much.”
As for Adidas, the lawsuit alleges that the sportswear company acted as an “agent and direct or indirect advocate” for Yuga, given its capital investment in the company, and approved “requests for Yuga papers to the public.” Last December, Adidas released its first NFT collection in collaboration with Bored Ape Yacht Club.
The UN has contacted Adidas for comment, as well as other people named in the suit.
These promotions helped to “artificially increase interest in and price of the BAYC NFTs,” the lawsuit alleged, prompting investors to purchase these assets at “drastically inflated prices.”
ApeCoin hit a new low of $2.70 per token in November, marking a 90% drop from its high when investors bought the coin. The NFT collection, including BAYC, also fell dramatically in value as well.
“The company presents the Bored Ape ecosystem as a brand that is organically loved by some of the most famous celebrities in the world,” the suit said. “But the truth is that the company’s entire business model relies on using insidious marketing and promotional activities by highly compensated A-listers (without disclosing such) to increase demand for the Yuga securities by convincing potential retail investors that the price on these digital assets will appreciate, and that these investors as members of the ‘club’ will have exclusive access to additional financial products and benefits.”
In October, Kim Kardashian faced a similar legal issue with the Securities and Exchange Commission after she posted about a crypto-asset security without saying she had received payment to promote it. Kardashian was ordered to pay $1.26 million in penalties, disgorgement and interest in an agreement to settle the charges, the SEC said.
