12/12/2022 Bieber, Madonna Among Dozens of Celebs Named in Lawsuit Alleging Yuga Labs NFT 'Scheme'

The suit claims celebrity endorsements of Bored Ape Yacht Club NFTs and ApeCoin tokens resulted in financial loss for investors. Yuga Labs called the allegations "opportunistic and parasitic."

CDCROP: Bored Ape Yacht Club NFT image (Yuga Labs, Modified by CoinDesk)

Bored Ape Yacht Club NFT image (Yuga Labs, modified by CoinDesk))

A number of celebrities, including Justin Beiber, Paris Hilton, Jimmy Fallon and Madonna, among others, were named as plaintiffs in a class-action lawsuit, alleging thatYuga Labsnon-fungible tokens (NFT) collections were "misleadingly promoted" and resulted in financial damage to the defendants.

Yuga Labs restructures, NFT prices grow: what’s next for the market?
Bitcoin Leads 30-Day NFT Sales, Outpacing 24 Blockchain Competitors
With Its Third NFT Art Drop, Playboy Exposes Full Crypto Commitment

The lawsuit, filed by John T. Jasnoch of Scott+Scott Attorneys at Law LLP in U.S. District Court for the Central District of California on Thursday, was brought forward on behalf of "investors" who purchased Yuga Labs NFTs including Bored Ape Yacht Club (BAYC) orApeCoin– the Ethereum-based governance and utility tokens used within the APE ecosystem – between April 2021 and the present. The two plaintiffs, Adam Titcher of California and Adonis Real of Florida, purchased Yuga Labs assets during that time.

Titcher purchasedMutant Ape Yacht Club #1984in August 2021 for 5.3 ETH (about $17,000 at the time) and mintedOtherdeed for Otherside #16235on OpenSea in April, while Adonis purchased an undisclosed amount of ApeCoin on Coinbase. According to the filing, both men purchased the assets "in reliance on the misleading promotions" from Yuga Labs and a number of celebrities, resulting in "investment losses."

The 95-page filing repeatedly refers to NFTs as securities, a question the U.S. Securities and Exchange Commission hasreportedly been investigating since March. In October, Bloomberg reported that theSEC was probing Yuga Labsto determine if sales of its digital assets violate federal law.

The suit also alleges that Yuga Labs and Web3 investor Guy Oseary were involved in a "vast scheme" and used crypto payments platform MoonPay as a "front operation" to promote and sell digital assets. "The executives at Yuga and Oseary together devised a plan to leverage their vast network of A-list musicians, athletes, and celebrity clients and associates to misleadingly promote and sell the Yuga Financial Products," the lawsuit reads.

In total, the lawsuit names 37 defendants, including the founders and leadership team at Yuga Labs; MoonPay and its CEO, Ivan Soto-Wright; Reddit co-founder and investor Alexis Ohanian; NFT artistBeeple; Ape DAO board members Amy Wu, Maaria Bajwa and Dean Steinbeck; Guy Oseary; Justin Beiber; Jimmy Fallon; Gwyneth Paltrow; Madonna; Paris Hilton; Serena Williams; Post Malone; Diplo; Snoop Dogg; Kevin Hart; Steph Curry; Future; The Weeknd; DJ Khaled; Adidas and several others.

The lawsuit alleges that BAYC and related NFTs "rely heavily on the perception that 'joining the club' ... brings investors status and provides them access to events, benefits, and other lucrative investment opportunities exclusive to BAYC holders."

"The exclusiveness of BAYC membership was entirely based on the inclusion and endorsements of highly influential celebrities," the lawsuit claims.

"Sales of digital assets like NFTs and tokens come with disclosure duties just like any other financial product," Jasnoch told CoinDesk. "And whether it is a company, [decentralized autonomous organization] or celebrity influencer, the individuals involved in misleading investors should be held accountable."

He added that celebrity endorsements created a "fear of missing out with an endless parade of Bored Ape and ApeCoin promotions. Had there been proper disclosure, the price wouldn't have swung so high and so wildly."

A spokesperson for Yuga Labs called the claims "opportunistic and parasitic. We strongly believe that they are without merit and look forward to proving as much."

Representatives for MoonPay and Guy Oseary did not immediately respond to CoinDesk's request for comment.

This is not the first time Scott+Scott attorneys have attempted to wage war on celebrity endorsements in the crypto space. The law firm was also behind the proposed class-action suit filed against celebrities including Kim Kardashian and Floyd Mayweather over their promotion of the cryptocurrencyethereumMaxon social media. A federal judge in Californiadismissed the suit on Thursday, stating that investors are expected "to act reasonably before basing their bets on thezeitgeistof the moment."

In his ruling, the judge said that lawyers for the plaintiffs could refile their lawsuit with amended claims.

"We were disappointed in the dismissal," Jasnoch told CoinDesk. "But the judge gave us leave to amend the complaint and gave us a bit of a road map to get a claim sustained. And he also said that the case raised important issues regarding celebrity promotion of crypto tokens."

Arts

https://www.coindesk.com/web3/2022/12/09/bieber-madonna-among-dozens-of-celebs-named-in-lawsuit-alleging-yuga-labs-nft-scheme/

Interesting NFTs
The King
Part of a series of three artworks entitled "The Rulers". Inspired by the rulers of the animal kingdom, african mandalas & diamonds. A very complex digital illustration, each lion consists of hundreds of custom diamond shapes. Each background is an intricate custom mandala that compliments the lions facial features.
great
Good morning! great here. I'm here to enjoy eating until I loathe myself and tripping my owner. I once got in a fight with a rabbit, and won. I hope we can be vegan friends.
Genesis
José Delbo sent me his striking pencil sketch and powerful inked work, which I then interpreted in oil on canvas. I wanted to create a very painterly piece with obvious brush marks etc, but I was also aiming for a nostalgic feel, a kind of 1980’s superhero comic book look, the kind I grew up with. My goal with this animation was to try to recreate, in part, the creative process that both artists went through with the visual information I had. I was able to showcase my painting process more accurately as I could take photographs of my progress throughout. Consecutive images could then be layered like brush strokes over José’s drawing to create the impression that this was one continuous artwork from pencil, to ink, to completed painting. The representation of the line sketch at the beginning, then pencil/ink and lastly the paint layers being applied demonstrate both artists’ struggle for the right lines, tone, form, and colour until the work is finally completed. As the oil was still wet with each photograph the glare of my studio lights can be seen in the brush strokes. Eventually, the figure emerges and as it does, our hero comes to life, looking directly at the viewer -- but is he grimacing in approval or disgust? We will never know for sure as just before he can say anything, white paint is brushed across the canvas entirely and the process begins again. Only the bat is quick enough to escape.
#47424
By OthersideDeployer
The Moth Catcher
In this psychologically bed-headed portrait, a creature sets in a trance; his eyes devolved and vestigal, his third eye open but hardened and in a form resembling a Sharingan. The imagery therefore expresses an awareness existing in corporeal introspection. The creature’s mind sprouts, on the left side, an emerging face, grinning. To the right side of the head, red tentacles and fingers intertwine–a collaboration of invertebrate and vertebrate consciousness cooperatively handling paint brushes of the sort used to build an oil painting. The neck and throat bristle with random thorns, as from a rose or the upper portions of a beak sprouting from its flesh. The neck itself disassociates into layers of membranous material, terminating upon an abstracted base of convoluted forms composing its body. The nose is virtually non existent, more a sinus reiterative of the shape of the third eye. Set against the exposed teeth peering out of thick, meaty cheeks, a skeleton-like impression results. That impression sets behind a visceral set of lips and tongue, which is the creature’s prime seat of awareness. Sensual, organic, the tongue organ hangs, meaty, and with consciousness of a sea cucumber. It illuminates at the tip, drawing the attraction of a nearby moth–with mystery of purpose.