The New York law firm Scott and Scott is looking to drum up plaintiffs to file a class action suit against Yuga Labs, alleging that the NFT juggernaut tapped celebrities to talk up the value of their tokens and lure in “unsuspecting investors” with the promise of high returns.
A slew of stars, including Gwyneth Paltrow, Eminem, and Madonna, acquired Bored Ape Yacht Club (BAYC) NFTs and promoted them on social media in the past year. In January, when Jimmy Fallon and Paris Hilton flouted their cartoon apes on national TV, it felt to many like a bad infomercial. Many of the new celebrity Ape collectors are with Creative Artists Agency (CAA), which owns a chunk of OpenSea, a popular marketplace for NFTs. (Madonna’s manager, Guy Oseary, represents Yuga Labs and is also a Yuga Labs investor.)
If it is to be successful, Scott and Scott will need to prove that BAYC NFTs are securities like stocks, bonds, or options. Legally, anyone issuing a security has to register it with the Securities and Exchange Commission to prevent fraud.
‘Enforcement 40’ for 2020
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