The proposed lawsuit claims that Yuga Labs roped in celebrities to promote and ‘inflate’ the prices of BAYC NFTs as well as its ApeCoin.
Snoop Dogg, Justin Bieber, Madonna among many celebrities who own BAYC NFTs
Photo Credit: Twitter/ Yuga Labs
Law firm Scott+Scott has proposed a class-action lawsuit, alleging that NFT firm Yuga Labs has manipulated buyers into investing in its digital collectibles. Yuga Labs is the creator of the popular Bored Ape Yacht Club (BAYC) NFTs and its native token is called the ApeCoin, which is currently priced $6.31 (roughly Rs. 500). The proposed lawsuit claims that Yuga Labs roped in celebrities to promote and ‘inflate' the prices of BAYC NFTs as well as its ApeCoin. Out of the 10,000 BAYC NFTs, the most expensive ones have touched prices exceeding $2,272,620 (roughly Rs. 18 crore).
The trigger point for this lawsuit is backed by an analysis on how the ApeCoin attained its all-time-high of $26.70 (roughly Rs. 2,130) before slipping down by 82.5 percent to trade at $4.66 (roughly Rs. 370) by June-end.
In March this year, the floor price of BAYC NFTs soared by over 25 percent. The development was triggered after BAYC parent Yuga Labs acquired two other popular NFT collections — CryptoPunks and Meebits.
By June-end however, the floor price, or the lowest price of BAYC NFTs, dropped from ETH 151.5 to ETH 92.9, the law firm has pointed out.
“Yuga Labs investors were inappropriately induced to buy financial products created by Yuga Labs namely the ApeCoin and the Bored Ape Yacht Club non-fungible tokens (BAYC NFTs). The leadership used celebrity promoters and endorsements to inflate the price of the company's NFTs and token,” said a blog post published by Scott+Scott.
The BAYC NFT series has a total of 10,000 variations of cartoonised, bored-looking apes. Snoop Dogg, Justin Bieber, Madonna, and Jimmy Fallon among several other celebrities possess expensive BAYC NFTs.
In its blog, the law firm has alleged that the NFT firm created the ApeCoin to “further fleece” unsuspecting investors after having sold off millions of dollars' worth of “fraudulently promoted NFTs”.
“Once it was revealed that the touted growth was entirely dependent on continued promotion (as opposed to actual utility or underlying technology) retail investors were left with tokens that had lost over 87 percent from the inflated price high on April 28, 2022,” the blog post noted.
The law firm has now opened channels for individual BAYC and ApeCoin investors to join this class action lawsuit against Yuga Labs. BAYC and ApeCoin holders who feel that they have suffered losses on BAYC NFTs and ApeCoin between April and June of this year can join in Scott+Scott in its class action lawsuit against Yuga Labs.
Meanwhile, the proposed lawsuit is meeting with satire and resistance on Twitter.
As of now, Yuga Labs has not yet issued a public statement on this proposed lawsuit hovering over its brand.
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