Celebrities who thought doing crypto promotions would be a quick way to make some easy money have another thing coming.
Weeks ago, Tom Brady, Giselle Bündchen, Larry David & Steph Curry were sued over a now-infamous Super Bowl ad promoting failed cryptocurrency exchange FTX.
Now, a class action lawsuit filed in federal court is targeting clebrities who were secretly compensated for shipping 'Bored Ape Yacht Club' NFTs, Deadline reports. The lawsuit includes Kevin Hart, Madonna, Jimmy Fallon, Justin Bieber, Paris Hilton, Serena Williams, DJ Khaled, Gwyneth Paltrow and a host of other celebrities.
Universal TV is also named as a defendant, while high-profile music manager Guy Oseary has been fingered as the 'brains' behind the operation.
"Defendants’ promotional campaign was wildly successful, generating billions of dollars in sales and re-sales," reads the lawsuit, filed by Adonis Real and Adam Titcher filed on December 8 in U.S. District Court in California. "The manufactured celebrity endorsements and misleading promotions regarding the launch of an entire BAYC ecosystem (the so-called Otherside metaverse) were able to artificially increase the interest in and price of the BAYC NFTs during the Relevant Period, causing investors to purchase these losing investments at drastically inflated prices," the filing continues.
As Deadline notes;
Essentially, on their various platforms, through public statements and in Fallon’s case on The Tonight Show in late November 2021, the celebs praised the Yuga Labs backed BAYC NFTs to the public by claiming to be customers themselves. Now, the allure of non-fungible tokens may have dimmed considerably ( a.k.a. nosedived) in recent months, but to BAYC buyers jumping on board last year, they quickly proved “losing investments at drastically inflated prices.”
With the Oseary-backed crypto company Moonpay working with Yuga to covertly slip payments to the promoting A-listed talent, the whole scheme saw Hart, Fallon, Paltrow give BAYC NFTs the seal of approval without the celebs revealing the often hefty compensation they were receiving.
"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," reads the 95-page fraud complaint, which contains 10 claims.
"During the Class Period, Defendants engaged in a plan, scheme, conspiracy, and course of conduct pursuant to which they knowingly or recklessly engaged in acts, transactions, practices, and courses of business that operated as a fraud and deceit upon Plaintiffs and the other members of the Class," the filing continues. "In truth, the Executive Defendants and Oseary used their connections to MoonPay and its service as a covert way to compensate the Promoter Defendants for their promotions of the BAYC NFTs without disclosing it to unsuspecting investors."
A spokesperson for Yuga Labs said in a statement that "We strongly believe that they are without merit, and look forward to proving as much."