Jimmy Fallon, Justin Bieber and Serena Williams sued over NFT campaigns
As NFTs and crypto gained a popular following and became increasingly mainstream, celebrities seemed to line up to sign lucrative endorsement deals for the digital assets, with many investing in them themselves.
For many of the A-listers who rode the NFT wave, however, that decision may not have aged well.
On Thursday, a class-action lawsuit was filed accusing a number of celebrities including Jimmy Fallon, Gwyneth Paltrow, Madonna and Justin Bieber of operating Bored Ape Yacht Club NFTs without disclosing that they had investments in Yuga Labs, the company behind the digital the assets.
An NFT, or non-fungible token, is a unique digital asset that belongs to its owner and only them. Last year, as the hype around them increased, NFTs sold for millions of dollars.
Some of these assets have fallen in value. While the price of Bored Ape NFTs hit an all-time high of more than $434,000 in April, they are now worth around $85,000, according to data from CoinGecko.
By July, NFT sales had fallen more than 90% to hit a 12-month low.
The new lawsuit, which was filed in the US District Court for the Central District of California according to reports from New York Post and The Hollywood Reporteraccused the celebrities involved of committing fraud by persuading amateur traders that the NFTs would increase in value.
The company’s entire business model relies on using insidious marketing and promotional activities by highly compensated (without disclosing) A-list celebrities to increase demand for the Yuga securities by convincing potential retail investors that the price of these digital the assets will appreciate. “, the complaint says, according to court documents seen by the media.
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Other celebrities named in the lawsuit include Kevin Hart, Snoop Dogg and Serena Williams and her husband, Reddit co-founder Alexis Ohanian. The celebrities named in the lawsuit did not respond Fortuneits requests for comments before publication.
The lawsuit claimed that a November 2021 segment on NBC’s “The Tonight Show” saw host Jimmy Fallon reveal that he had purchased his first Bored Ape NFT through MoonPay — without any disclosure that he had a stake in the firm.
In accordance The mailplaintiffs accused the show of including a “paid ad for the BAYC collection of NFTs and MoonPay” that was masked as a “purported organic segment.”
NBCUniversal did not respond Fortuneits request for comment.
The plaintiffs also accused pop superstar Bieber of falsely claiming that he purchased a $1.3 million NFT when it was actually given to him in exchange for his promotion of Yuga Labs’ products.
According to reports, most of the celebrities endorsing Yuga Labs’ products were recruited by talent manager Guy Oseary, who paid them through crypto firm MoonPay, in which he was an investor.
“Oseary, the MoonPay Defendants and the Promoter Defendants all shared the strong motive to use their influence to artificially create demand for the Yuga Securities, which in turn would increase the use of MoonPay’s crypto payment service to handle this new demand,” it said legal documents. , according to The Hollywood Reporter.
“At the same time, Oseary was also able to use MoonPay to hide how he paid his celebrity groups for their direct or off-label promotions by Yuga Financial Products.”
Representatives for Yuga Labs were not immediately available when contacted by Fortunebut a spokesperson for the company said The Hollywood Reporter last week the claims made were “opportunistic and parasitic”.
“We strongly believe they are without merit, and look forward to proving as much,” they said.
Founded last year, Yuga Labs quickly established itself as a key player in the NFT space, with its Bored Ape Yacht Club among its most popular gatherings.
The lawsuit filed Thursday is not the first involving celebrities and digital assets, and previous cases have had mixed outcomes.
Earlier this year, reality TV star Kim Kardashian was fined $1 million by the SEC for naming a cryptocurrency without properly disclosing that she was paid to do so.
However, a federal judge dismissed a class-action lawsuit against celebrity crypto endorsers earlier this month, saying there was an expectation that investors “act reasonably before basing their bets on the zeitgeist of the moment.”
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