A class action lawsuit filed Thursday alleges that a slew of celebrities—including Justin Bieber, Madonna, Steph Curry, and Paris Hilton—violated state and federal laws when they promoted Bored Ape Yacht Club NFTs while failing to disclose their financial relationships to Yuga Labs.
The suit, filed yesterday in the U.S. District Court’s Central District of California, named no less than 37 co-defendants—ranging from Yuga leadership to celebrities and executives. MoonPay, a crypto payments startup, is also named in the suit.
Though the suit lists 10 charges ranging from violations of California’s consumer protection laws to violations of federal securities laws, its 100-page filing Tells a story.
It details an elaborate alleged conspiracy, engineered by Hollywood’s elite, to boost the value of Bored Apes with a torrent of celebrity promotions—all while secretly enriching all involved via a covert payments scheme laundered through a prominent crypto company.
The suit alleges that talent manager Guy Oseary—Madonna’s longtime representative, as well as Yuga’s—instructed his extensive celebrity network to publicly support Yuga’s products, including Bored Ape NFTs, in exchange for payments from Yuga secretly funneled through MoonPay. Oseary is also listed as a codefendant in this suit. He was an early investor of MoonPay.
MoonPay, now valued @ $3.4 Billion, counts many of the suit’s celebrity defendants among its investors, including Bieber, Curry, Hilton, Kevin Hart, Jimmy Fallon, and Gwyneth Paltrow. It was known for its white-glove services that allowed celebrities to buy high-value NFTs.
Thursday’s suit argues that MoonPay was instead a “front operation,” which secretly passed payments from Yuga Labs—the $4 billion company behind the Bored Ape Yacht Club—to celebrities who went on to promote the NFTs without disclosing their enrichment, at Oseary’s direction.
Yuga Labs vigorously refutes the allegations.
“In our view, these claims are opportunistic and parasitic,” a company spokesperson told Decrypt. “We strongly believe that they are without merit, and look forward to proving as much.”
Scott+Scott has been notified about the suit. Another suit in a class-action suit Yuga. This suit claimed that the company had violated securities law by selling and encouraging Bored Ape NFTs. ApeCoin, the Bored Ape ecosystem’s Ethereum-based token.
The law firm did in fact not respond immediately to a request for comment.
To succeed in the suit, the plaintiff’s attorneys will have to prove that Yuga’s cadre of celebrity amplifiers engaged in unfair or deceptive practices when they endorsed the company’s products. A covert operation to conceal payments would be almost certain to meet that standard. But, whether such a scheme is possible to prove is another matter.
The complaint, echoing the firm’s earlier suit, also claims that Bored Ape NFTs were unregistered securities. This allegation, if proven, would raise the bar for disclosure information.
American courts have not yet ruled on whether “blue chip” profile photos (PFPs) NFT collections such the Bored Ape Yacht Club can be considered securities. October report The U.S. Securities and Exchange Commission is currently investigating Yuga Labs for possible securities violations.