Four investors who purchased the popular NFT collection Bored Ape Yacht Club (BAYC) have launched a class action lawsuit against the project’s inventor, Yuga Labs, and 29 other firms for misleadingly advertising the collectibles while their values continue to fall.
According to CNN, additional defendants in the complaint include art auction organization Sotheby’s Holdings, sportswear behemoth Adidas, cryptocurrency payment service MoonPay, and celebrities such as Canadian musician Justin Bieber and American media figure Paris Hilton.
Sotheby’s was accused by the plaintiffs of conspiring with Yuga Labs to fraudulently increase the pricing of the BAYC NFTs. They called Sotheby’s 2021 sale of 100 items to a single bidder for more than $24 million fraudulent, claiming that Yuga Labs had hired the auction house to increase buzz and investor interest in the collection.
Bieber and Hilton, on the other hand, were accused of promoting BAYC without disclosing their financial stake in the venture. Hilton’s agents reportedly feigned interest in the artifacts in order to profit financially.
Adidas is accused of conspiring to fraudulently raise NFT pricing through a plan, while MoonPay is accused of market manipulation. According to the investors, Yuga Labs discreetly utilized MoonPay to settle its “celebrity cohorts,” making interest in the BAYC collection appear organic rather than the consequence of a sponsored campaign.
In response to the class action, a Yuga Labs spokeswoman stated that the accusations were “without merit or factual basis.” Because the case is an altered version of one filed in December, the representative described it as “opportunistic,” as was the prior one.
“Yuga Labs, as a media and technology company, has empowered strong communities of enthusiasts and entrepreneurs to innovate, connect, and build.” Their vision has inspired community-driven projects that have captivated the attention of people all across the world. “That is the story worth telling,” stated the spokeswoman. Sotheby’s dismissed the lawsuit’s accusations and stated that it is prepared to defend itself in court.
The plaintiffs are seeking a jury trial and damages in excess of $5 million. Meanwhile, BAYC NFT prices, which peaked during the 2021 hype, have dropped dramatically in the last year. According to CoinGecko statistics, the collection had a floor price of 25 ether ($42,700) at the time of writing, down more than 66% from a year earlier.