Looks like a good old fashion cash grab celebrity endorsement has become a bit more fraught when it comes to the digital marketplace nowadays.
Less than a month after the likes of Larry David, Tom Brady Gisele Bundchen, and Stephen Curry were sued for bringing their well compensated star power to pitch now collapsed cryptocurrency firm FTX, a new class action filed in federal court aims to take the Golden State Warriors superstar and a pantheon of big names to the financial woodshed over shilling Bored Ape Yacht Club NFTs for hidden payoffs.
It’s an action that turns the spotlight uncomfortably not just on Curry again, but also Kevin Hart, Madonna, Jimmy Fallon, Justin Bieber, Paris Hilton, Serena Williams, DJ Khaled, Gwyneth Paltrow, and more. Along with Universal TV also being named as a defendant, high profile music manager Guy Oseary is specified as the brains behind the whole alleged big bucks scam.
“Defendants’ promotional campaign was wildly successful, generating billions of dollars in sales and re-sales,” says the lawsuit from 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 jury trial seeking 10-claim suit adds (read it here).
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.”
“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,” the 95-page fraud complaint states.
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.
“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 document declares. “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,” it adds
A spokesperson for Comcast-owned Universal TV said the company does not comment on legal matters. “In our view, these claims are opportunistic and parasitic,” a Yuga Labs spokesperson said in a statement today. “We strongly believe that they are without merit, and look forward to proving as much.”
Represented by San Diego-based attorney John T. Jasnoch, plaintiffs Real and Titcher have defined the potential Class in what could be a very pricey action as all those who invested in “Yuga Financial Products” between April 23, 2021 and now. They are looking for “actual, general, special, incidental, statutory, punitive, and consequential damages and restitution.”
And that will be in cold hard U.S. Treasury printed cash, not crypto, if you know what I mean?
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