As NFTs and crypto gained a popular following and became increasingly mainstream, celebrities lined up to sign lucrative endorsement deals for the digital asset, with many investing in themselves.
For the many A-listers riding the NFT wave, however, this decision may not have aged well.
On Thursday, a class action lawsuit was filed accusing celebrities including Jimmy Fallon, Gwyneth Paltrow, Madonna and Justin Bieber of owning the Bored Ape Yacht Club NFT without clarifying that they invested in Era Labs, the company behind the digital asset. did. ,
An NFT, or non-fungible token, is a type of digital asset that belongs to its owner and them only. Last year, as the hype around them increased, NFTs were selling for millions of dollars.
Some of those properties have declined in value. While the price of Bored App NFTs hit an all-time high of over $434,000 in April, they are now worth around $85,000 according to data from CoinGecko.
By July, NFT sales had dropped by more than 90% to reach a 12-month low.
The new lawsuit, which was reportedly filed in the US District Court for the Central District of California New York Post And Hollywood reporterAlleged celebrities involved in fraud by persuading amateur traders that NFTs would increase in value.
“The company’s entire business model relies on using fraudulent marketing and promotional activities from A-list celebrities, who are highly compensated (without disclosure), to drive demand for Yuga Securities by convincing potential retail investors that The price of these digital assets will appreciate,” the complaint said, according to court documents seen by media outlets.
A Bored Ape Yacht Club NFT billboard in Times Square during the fourth annual NFT.NYC convention on June 23, 2022.
Other celebrities named in the legal action 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 Good luckRequest for comment prior to publication.
The lawsuit alleges that host Jimmy Fallon revealed in a November 2021 segment on NBC’s “The Tonight Show” that he bought his first Bored App NFTs through Moonpay — without disclosing that he held a stake in the firm. Was.
According to PostPlaintiffs accused the show of including “paid advertising for the BAYC collection of NFTs and Moonpay,” which was showing as an “allegedly organic segment.”
NBCUniversal did not respond Good luckRequest for comment.
The claimants also accused pop superstar Bieber of falsely claiming that he purchased the NFT for $1.3 million, when in fact it was given to him in exchange for promoting Yuga Labs products.
According to reports, most of the celebrities endorsing Era Labs’ products were hired by talent manager Guy Oseary, who paid them through crypto firm Moonpay, in which he was an investor.
The court documents state, “Osery, Moonpay Defendants and Promoter Defendants each shared strong motive to use their influence to artificially create demand for Yuga Securities, which in turn would result in the destruction of Moonpay’s crypto payment service.” Will increase usage.” , According to Hollywood reporter,
“At the same time, Oseary may also have used Moonpay to obscure how he paid his celebrity peers for direct or off-label promotion of Era financial products.”
Representatives of Yuga Labs were not immediately available when contacted Good luckBut a company spokesperson told hollywood reporter The claims being made last week were “opportunistic and parasitic”.
“We strongly believe they are without merit, and look forward to proving as much,” he said.
Era Labs was founded last year, and has quickly established itself as a major player in the NFT space, with Bored Ape Yacht Club among its most popular collections.
The lawsuit filed on Thursday is not the first involving celebrities and digital assets, and previous cases have drawn mixed results.
Earlier this year, reality TV star Kim Kardashian was fined $1 million by the SEC without disclosing that she was being paid to do so.
However, a federal judge earlier this month dismissed a class action case against celebrity crypto endorsers, stating that investors are expected to “due diligence before placing their bets on the zeitgeist of the moment.” Do the work.”
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