A class action lawsuit was filed against Yuga Labs, the parent company of Bored Ape Yacht Club (BAYC), on Friday, in which investors claimed the company didn’t disclose celebrities’ alleged involvement in promoting and selling NFTs (non-fungible tokens).
The lawsuit, seen by Gizmodo, named celebrities who were reportedly used to increase revenue by billions of dollars that were generated by their endorsements. The plaintiffs, Adonis Real and Adam Titcher claim the campaign artificially inflated the interest and price of BAYC, causing investors to purchase these losing investments at drastically inflated prices.
Real and Titcher filed the lawsuit last week and are seeking monetary damages for themselves and others affected by the alleged scheme.
Guy Oseary, a talent manager for stars including Madonna and U2, is named as the primary defendant in the lawsuit. Oseary is a partner in Yuga Labs and is allegedly heavily involved in managing many of the celebrities who promoted BAYC NFTs.
According to the lawsuit, Oseary “entirely manufactured” a front operation of MoonPay, in which he is an investor, to promote and sell digital assets. MoonPay is a crypto payment platform that acts as a mid-way service for celebrity NFT transactions.
The lawsuit claims BAYC relied “heavily on the perception that ‘joining the club’ (i.e., buying a BAYC NFT) brings investors status and provides them access to events, benefits, and other lucrative investment opportunities exclusive to BAYC holders.”
The lawsuit continued, adding, “The exclusiveness of BAYC membership was entirely based on the inclusion and endorsements of highly influential celebrities.”
The lawsuit names Gwyneth Paltrow, Paris Hilton, Jimmy Fallon, Kevin Hart, Serena Williams, DJ Khaled, and others—amounting to a total of 37 defendants as part of the purported involvement in BAYC and for “promoting and selling a suite of digital assets.” The lawsuit adds, “at no point did any of the defendants register these securities with the SEC.”
BAYC is comprised of more than 10,000 NFTs of cartoon monkeys in different outfits and its cheapest NFT is valued at around $88,000, according to CNET. Its value makes BAYC one of the most successful and exclusive NFT art collections.
A Yuga Labs spokesperson said in a statement to numerous outlets including The A.V. Club, “In our view, these claims are opportunistic and parasitic. We strongly believe that they are without merit, and look forward to proving as much.
