Jimmy Fallon, Madonna and Snoop Dogg among celebrities sued for endorsing Bored Ape NFTs
Hollywood stars Jimmy Fallon, Snoop Dogg, Gwyneth Paltrow and Justin Bieber are among the list of celebrities who have been sued for fraudulently promoting Bored Ape Yacht Club NFTs in a proposed class action lawsuit. According to the lawsuit filed by MARKETING INTERACTIVEAbout 30 celebrities are being sued, including Stephen Curry, Reddit founder Alexis Ohanian, Serena Williams and Paris Hilton.
The lawsuit alleged that the celebrities tricked their fans into buying Bored Ape Yacht Club NFTs as well as other unregistered securities provided by Yuga Labs, the parent company of the Bored Ape Yacht Club NFT series, in order to increase their value. This has prompted consumers to buy “losing investments at drastically inflated prices,” said The Hollywood Reporter.
The lawsuit argued that these endorsements could be illegal if they did not disclose the nature, source and amount of compensation paid, directly or indirectly, by the company in exchange for the endorsement. It also explained that this case highlights those concerns as it involves a large scheme between Yuga Labs, a highly connected Hollywood talent agent named Guy Oseary, and a front operation known as Moonpay, all of whom joined together for the purpose of promoting and selling a suite of digital assets,” the lawsuit further claimed.
According to the lawsuit, Oseary and Yuga’s executives hatched a plan to use their wide network of A-list musicians, athletes and celebrity clients and associates to “misleadingly promote and sell” Yuga Financial Products. The lawsuit seeks approximately $5 million on behalf of the plaintiffs and the putative class of ‘all others similarly situated, Variety so.
Quoting a Yuga Labs spokesperson, Variety reported that the allegations in the lawsuit are “opportunistic and parasitic” and without merit. MARKETING INTERACTIVE has contacted Yuga Labs for comment. Meanwhile, Snoop Dogg’s son, Cordell Broadus, also has a Bored Ape NFT named Champ Medici, but he is not one of the people being sued.
Celebrities have recently come under fire for promoting digital assets. Recently, Kim Kardashian was charged by the US Securities and Exchange Commission (SEC) for promoting on social media a crypto-asset security offered and sold by EthereumMax without disclosing the payment she received for the promotion.
As a result, Kardashian will pay $1.26 million in penalties, disgorgement and interest, and cooperate with the commission’s ongoing investigation. She also agreed not to market any crypto-asset securities for three years. American boxer Floyd Mayweather, who backed EthereumMax in his boxing match, was also sued in January over allegations that he misled investors.
Just last week, however, a federal judge dismissed the crypto fraud lawsuit against Kardashian and Mayweather. According to CNBC, Judge Michael Fitzgerald acknowledged that the lawsuit’s allegations raised legitimate concerns about celebrities’ ability to “easily persuade millions of uncritical followers to buy snake oil with unprecedented ease and reach”.
However, the law also places restrictions on advertisers and expects investors to “act reasonably” before betting on the trends of the moment. Fitzgerald also found the plantiff’s claims insufficiently supported, CNBC reported.
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