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A new federal complaint accuses a number of celebrities, including Jimmy Fallon, Gwyneth Paltrow, and Madonna, of fraud for promoting Bored Ape Yacht Club NFTs.
Plaintiffs allege that A-listers sold non-fungible tokens, whose value has plunged over the past year, without disclosing their investment in the business behind them, Yuga Labs.
According to a complaint filed Thursday in US District Court for the Central District of California, “The Company’s entire business model relies on using deceptive marketing and promotional activities from A-list celebrities who are highly compensated (without disclosing such) in order to increase demand for Yuga securities.”
The proposed class action alleges that prominent NFT advocates committed fraud by persuading regular investors that the value of digital assets would rise.
Some of these investments are currently worth approximately 10% of their initial value.
The lawsuit alleges that celebrities deceived fans by promoting Bored Ape Yacht Club NFTs.
Justin Bieber, Kevin Hart, Stephen Curry, Serena Williams and her husband Reddit CEO Alexis Ohanian, Snoop Dogg, The Weeknd, and DJ Khaled are all mentioned in the lawsuit. Defendants also include Adidas and Jimmy Fallon’s producing firm, Election Hot Dog.
The lawsuit alleges that talent manager Guy Oseary was responsible for the majority of the advertisements, enlisting celebrities for payment through a cryptocurrency company, Moonpay, in which he had also invested. According to the complaint, this enabled Moonpay earn money as well.
The action contends that Fallon did a piece on NFTs on NBC’s “The Tonight Show” in November 2021, telling viewers that he obtained his first Bored Ape Yacht Club NFT through Moonpay, without disclosing that he had an investment in Moonpay.
The complaint says that neither the talk show host nor NBC disclosed to the audience that “this apparently organic section on the Tonight Show was in fact a sponsored commercial for the BAYC collection of NFTs and MoonPay.”
According to the lawsuit, Jimmy Fallon promoted NFTs on his broadcast without revealing his own financial interest.
According to the lawsuit, Bieber also falsely stated he purchased an NFT for $1.3 million when, in reality, it was handed to him in exchange for advertising.
Yuga Labs stated in a statement that the lawsuit lacks validity.
“These allegations are, in our opinion, opportunistic and parasitic. We firmly think they are without merit and look forward to proving it,” Yuga Labs said in a statement to the Hollywood Reporter, which first reported the lawsuit.