- Four (BAYC) investors file a class action lawsuit against Yuga Labs and 29 other companies, including Sotheby’s, Adidas, MoonPay, Justin Bieber, and Paris Hilton.
- The investors allege that Yuga Labs and Sotheby’s artificially inflated BAYC NFT prices, while Bieber and Hilton promoted the project without disclosing their financial gains.
Four investors who purchased the popular NFT collection Bored Ape Yacht Club(BAYC) have filed a class action lawsuit against the project’s creator, Yuga Labs, and 29 other companies for misleadingly promoting the collectibles as their prices continue to decline.
According to CNN, other defendants in the lawsuit include art auction corporation Sotheby’s Holdings, sportswear behemoth Adidas, cryptocurrency payment firm MoonPay, and celebrities such as American media personality Paris Hilton and Canadian singer Justin Bieber.
BAYC Investors Sue Yuga Labs and Others
The plaintiffs accused Sotheby’s of working with Yuga Labs to inflate the BAYC NFTs’ prices artificially. They labeled Sotheby’s 2021 sale of 101 collectibles to a single buyer for more than $24 million deceptive, claiming that Yuga Labs had hired the auction house to increase hype and investor interest in the collection.
On the other hand, Paris Hilton and Justin Bieber were accused of promoting BAYC without disclosing their financial stake in the project. Hilton’s representatives allegedly feigned interest in the collectibles to profit financially.
Adidas is accused of artificially conspiring to inflate NFT prices through a scheme, and MoonPay was accused of market manipulation. According to the investors, Yuga Labs secretly used MoonPay to settle their “celebrity cohorts,” making interest in the BAYC collection appear organic rather than the result of a paid promotion.
Yuga Labs and Sotheby’s Refute the Allegations
In response to the class action, a Yuga Labs spokesperson stated that the allegations were “without merit or factual basis.” Given that the lawsuit is an amended version of one filed in December, the representative described it as “opportunistic,” just like the previous one.
The spokesperson stated, “As a media and technology company, Yuga Labs has empowered strong communities of enthusiasts and entrepreneurs to innovate, connect, and build. Their creativity has fostered community-driven projects that have captured the imagination of people around the world. That’s the story worth telling.”
Sotheby’s dismissed the lawsuit‘s allegations and stated that it is prepared to defend itself in court.
The plaintiffs want a jury trial and damages of over $5 million.
Meanwhile, BAYC NFT prices, which peaked during the 2021 hype, have dropped significantly in the last year. According to CoinGecko data, the collection had a floor price of 22.79 ether ($37,913) at the time of writing, down more than 66% from a year ago.
