[ad_1]
Adidas and a slew of celebrities, including Paris Hilton, Stephen Curry and Serena Williams, have been named in a class action lawsuit over their promotion of digital currencies and NFTs from Yuga Labs, including its flagship NFT collection Bored Ape Yacht Club (BAYC).
The suit, which was filed Thursday in the U.S. District Court for the Central District of California, represents investors who were impacted from buying Yuga NFTs and its native token, ApeCoin, between April 23, 2021, through Dec. 8, 2022. The suit seeks more than $5 million for the impacted class.
More from Footwear News
To lure in investors, Yuga allegedly used celebrities to “misleadingly promote” its NFTs, making these celebrity promotions appear organic and unpaid. According to the suit, Yuga also misrepresented its growth prospects, financial ownership and financial benefits for investors.
“In our view, these claims are opportunistic and parasitic,” a Yuga Labs spokesperson told FN. “We strongly believe that they are without merit and look forward to proving as much.”
With regard to Adidas, the suit claims that the sportswear company acted as an “agent and direct or indirect spokesman” for Yuga, given its capital investment in the company, and authorized “the solicitations of Yuga securities to the public.” Last December, Adidas released its first NFT collection in collaboration with Bored Ape Yacht Club.
FN has reached out to Adidas for a comment, as well as other individuals named in the suit.
These promotions helped “artificially increase the interest in and price of the BAYC NFTs,” the suit alleged, which caused investors to buy these assets at “drastically inflated prices.”
ApeCoin hit a new low of $2.70 per token in November, marking a 90% drop from its high when investors were purchasing the coin. NFT collection, including BAYC, also dramatically fell in value as well.
“The company presents the Bored Ape ecosystem as a brand that is organically beloved by some of the most famous celebrities in the world,” read the suit. “But the truth is that the company’s entire business model relies on using insidious marketing and promotional activities from A-list celebrities that are highly compensated (without disclosing such), to increase demand of the Yuga securities by convincing potential retail investors that the price of these digital assets would appreciate and that, as members of ‘the club,’ these investors would be given exclusive access to additional financial products and benefits.”
In October, Kim Kardashian ran into a similar legal issue with the Securities and Exchange Commission after she posted about a crypto asset security without saying she had received payment to promote it. Kardashian was ordered to pay $1.26 million in penalties, disgorgement, and interest in an agreement to settle the charges, the SEC said.
Sign up for FN’s Newsletter. For the latest news, follow us on Facebook, Twitter, and Instagram.
Click here to read the full article.
[ad_2]
Source link