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Yuga Labs “Inappropriately Induced” the Community to Buy BAYC NFTs

Legal

cryptoknowmics.com 25 July 2022 08:27, UTC
  
Reading time: ~2 m

The community was alleged "inappropriately induced" to purchase Bored Ape Yacht Club non-fungible tokens (NFTs) and the project's associated ApeCoin (APE) by Yuga Labs, according to a proposed class-action lawsuit. Additionally, it claims that Yuga Labs encouraged "unsuspecting investors" to participate by touting the growth prospects and potential for enormous rewards.

Yuga Labs Introduced ApeCoin

YUGA LABS introduced the ApeCoin to "further defraud investors" after selling off millions of dollars worth of "falsely advertised NFTs." Affected investors who lost money on BAYC NFTs and Apecoin between April and June of this year are being sought out by the law firm. https://twitter.com/kevwuzy/status/1551129999545348097 APE reached an all-time high of $26.70 over this period before falling around 82.5 percent to $4.66 at the end of June, while the floor price decreased from 151.5 ETH to 92.9 ETH. The anticipated lawsuit doesn't seem to have much of an impact on the neighborhood, according to BAYC holder @SoapBoxCar, who tweeted on July 24 that many people are upset they "got rekt" when they bought at the top. https://twitter.com/SoapBoxCar/status/1551306087667834880 If the case ever makes it to court, it appears that Scott+Scott will have to demonstrate that Yuga Labs and its celebrity sponsors violated the law by failing to disclose their paid marketing. Given the strength of Yuga Labs' initiatives and the fact that the law firm is also alleging a pump and dump incident, it may be challenging to demonstrate that it engaged in such tactics. Pump and dumps, also known as rug pulls, typically indicate that a project has artificially overvalued community assets before abandoning it altogether.


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