Post by dividavi on Dec 10, 2022 19:49:04 GMT
For those wondering, here's how wikipedia defines an NFT
A non-fungible token (NFT) is a unique digital identifier that cannot be copied, substituted, or subdivided, that is recorded in a blockchain, and that is used to certify authenticity and ownership.[1] The ownership of an NFT is recorded in the blockchain and can be transferred by the owner, allowing NFTs to be sold and traded. NFTs can be created by anybody, and require few or no coding skills to create.[2] NFTs typically contain references to digital files such as photos, videos, and audio. Because NFTs are uniquely identifiable assets, they differ from cryptocurrencies, which are fungible.
Bieber, Madonna Among Dozens of Celebs Named in Lawsuit Alleging Yuga Labs NFT 'Scheme'
www.yahoo.com/news/bieber-madonna-among-dozens-celebs-221930682.html
Rosie Perper
Sat, December 10, 2022 at 5:19 AM·4 min read
In this article:
Justin Bieber
Canadian singer-songwriter
Madonna
American singer, songwriter and actress (born 1958)
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 that Yuga Labs non-fungible tokens (NFT) collections were "misleadingly promoted" and resulted in financial damage to the defendants.
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) or ApeCoin – 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 purchased Mutant Ape Yacht Club #1984 in August 2021 for 5.3 ETH (about $17,000 at the time) and minted Otherdeed for Otherside #16235 on 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 has reportedly been investigating since March. In October, Bloomberg reported that the SEC was probing Yuga Labs to 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 artist Beeple; 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 cryptocurrency ethereumMax on social media. A federal judge in California dismissed the suit on Thursday, stating that investors are expected "to act reasonably before basing their bets on the zeitgeist of 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."
