The Bored Ape Yacht Club is one of the most popular NFT collections in the world, having brought in millions in sales and becoming perhaps the most recognisable collection within and outside the industry. One of the reasons for its popularity is undoubtedly its connection to celebrity culture, with many top stars like Justin Bieber and Post Malone owning pieces from it.
Now, a plethora of stars are at the centre of a class-action lawsuit against Yuga Labs, the parent company for the collection. This suit, filed on December 8, 2022, alleges that several celebrities violated securities law by not disclosing their financial connection to Yuga Labs when promoting their assets.
The Case Against Yuga Labs
It should be noted that while celebrities like Madonna and Serena Williams are at the centre of this suit, they are not the only ones being named. Besides Yuga Labs itself, crypto asset firm MoonPay is also listed in the suit, which claims that there was an elaborate plot to shill Bored Apes to the masses and enrich those involved.
How this allegedly worked is that Guy Oseary, who is known as the long-time manager for singer Madonna, had a roster of celebrities publicly support Yuga Labs’ NFTs and in exchange for this, they were given payments through MoonPay, which Oseary also has a connection with. It should be noted that many of the Bored Ape purchases for celebrities were actually conducted by MoonPay, which makes the suit even more complicated.
While nothing has been proven yet, it is worth noting that Bored Apes and other blue-chip NFTs are quite popular because celebrities have bought into them so much. Just like with sports cars and designer clothing, the fact that many stars own Yuga Labs-affiliated NFTs would have made more people want to buy them.
But at the same time, this case will have to prove that the celebrities were being paid to promote these assets and did not disclose them, which is no easy feat. Yuga Labs, on its part, has denied all these allegations.
“In our view, these claims are opportunistic and parasitic. We strongly believe that they are without merit, and look forward to proving as much,” Yuga Labs said in a statement to Decrypt.
And this is on top of another investigation that Yuga Labs is currently facing which alleges that it violated securities laws in the sale of its digital assets. And then there is the investigation that the hacktivist group Anonymous is conducting into Yuga Labs regarding its origins.
The Celebrity and Digital Asset Dilemma
As digital assets like crypto and NFTs are becoming more popular, they are being promoted by celebrities to their fans. This, however, has some legal implications, especially when it comes to disclosure.
Just recently, a judge dismissed a similar case of celebrities like Kim Kardashian promoting a crypto project which eventually failed. These cases, ultimately, set the precedent for celebrity digital asset promotions.