Justin Bieber, Snoop Dogg, The Weeknd and dozens of other celebrities are facing a new class action alleging they were secretly paid to “misleadingly” promote NFTs like the Bored Ape Yacht Club, leaving investors with “staggering losses.”
In a complaint filed Thursday in Los Angeles federal court, attorneys for a pair of consumers claimed that Bored Ape parent company Yuga Labs Inc. perpetrated a “vast scheme” in which they “discreetly” paid “highly influential celebrities” to pump up the value of the NFTs (non-fungible tokens).
“Defendants’ promotional campaign was wildly successful, generating billions of dollars in sales and re-sales,” the lawyers for the plaintiffs wrote. “The manufactured celebrity endorsements and misleading promotions … were able to artificially increase the interest in and price of the BAYC NFTs…, causing investors to purchase these losing investments at drastically inflated prices.”
Though this “conspiracy” eventually “raked in millions” for the various defendants, the lawsuit said investors in Bored Ape and other NFTs “were left with staggering losses.”
Yuga Labs and reps for Justin Bieber, Snoop Dogg, The Weeknd also did not return requests for comment.
The case is the latest over celebrity endorsements for cryptocurrencies and NFTs, which soared in value during 2020 and 2021 but have taken a bruising as the economy has slowed in 2022.
In January, investors sued Kim Kardashian, Floyd Mayweather and others earlier this year for promoting the cryptocurrency EthereumMax. And last month, after the spectuacular collapse of crypto company FTX, investors filed a similar suit against Larry David, Tom Brady, Giselle Bündchen, Shaquille O’Neal and Stephen Curry.
But such cases could be facing legal headwinds. The lawsuit against Kardashian and others over EthereumMax was dismissed by a federal judge on Wednesday, who said the conduct raises “legitimate concerns” about online “snake oil,” but that investors must still be expected to “act reasonably before basing their bets on the zeitgeist of the moment.”
Notably, that case was filed by the same lawyer, John T. Jasnoch of Scott + Scott, who filed the new case on Thursday against Yuga Labs. The new case was brought by Adonis Real and Adam Titcher, two consumers who say they bought NFTs, on behalf of potentially thousands of other buyers.
The new lawsuit centers on an alleged partnership between Yuga and music industry bigwig Guy Oseary – longtime manager to Madonna, U2, Red Hot Chili Peppers and others – in which they aimed to “leverage their vast network of A-list musicians, athletes, and celebrity client” to promote Bored Ape and other offerings.
The plaintiffs claim that this was achieved via MoonPay, a crypto platform in which Oseary’s venture capital firm had allegedly invested. Since the celebrity defendants were also allegedly investors in MoonPay, the lawsuit claims Yuga and Oseary used it “as a covert way to compensate the Promoter Defendants for their promotions of the BAYC NFTs without disclosing it to unsuspecting investors.”
Oseary did not immediately return requests for comment on the allegations.
Read the entire complaint here:
Daily newsletters straight to your inbox