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A slew of celebrities — including Jimmy Fallon, Gwyneth Paltrow and Madonna — are being accused of fraud for hawking Bored Ape Yacht Club NFTs, according to a recent federal lawsuit.
The group of plaintiffs claim that the A-listers peddled the non-fungible tokens — which have plummeted in value in the last year — without disclosing their investment in the company behind them, Yuga Labs.
“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,” according to the complaint filed Thursday in US District Court for the Central District of California.
The proposed class-action suit says the famous NFT-backers committed fraud “by convincing potential retail investors that the price of these digital assets would appreciate.”
Now, some of those investments are worth about 10% of their original value.
The suit also says Bieber fraudulently claimed he purchased an NFT for $1.3 million, when it was actually gifted to him in exchange for promotion.
Yuga Labs said in a statement it believes the suit to be without merit.
“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 told the Hollywood Reporter, which first reported the suit.
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