A new class action lawsuit alleges that Yuga Labs, the company behind ApeCoin and Bored Ape Yacht Club, swindled investors.
Miami-based Yuga touted its non-fungible tokens (NFTs) and coins for having huge growth prospects and investment returns through celebrity promoters and endorsements, according to Scott+Scott, the law firm organizing the case.
“After selling off millions of dollars of fraudulently promoted NFTs, YUGA LABS launched the Ape Coin to further fleece investors," the firm stated.
Growth was entirely dependent on continued promotion, as opposed to utility or underlying technology, Scott+Scott added. As a result, investors "were left with tokens that had lost over 87% from the inflated price high on April 28, 2022."
Scott+Scott is now asking individual investors who suffered losses to reach out to the firm and seek restitution.
Yuga has not yet responded to the allegation.
Recently, Yuga had sued artist Ryder Ripps for copyright infringement, claiming that buyers were being scammed into buying identical NFTs and that it was a "deliberate effort to harm Yuga Labs at the expense of consumers." Ripps was referred to as "a self-proclaimed 'conceptual artist” in the lawsuit, which claimed that he created an identical NFT collection of BAYC images he did not purchase.
Yuga Labs is backed by venture capital fund a16z crypto, as well as LionTree, Sound Ventures and Thrive Capital. It recently raised $450 million and is valued at about $4 billion.
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