In Los Angeles, 37 celebrities including Madonna, Justin Bieber and Jimmy Fallon have been charged with fraud related to the Bored Ape Yacht Club.
Los Angeles – While NFTs are virtual, the alleged fraud with them is very real. 37 celebrities, including Justin Bieber (28) and Gwyneth Paltrow (50), are part of a class action lawsuit against a crypto firm.
Adonis Real and Adam Titcher on Friday filed a ten-count lawsuit against the Yuga Labs group and its founders, as well as the aforementioned celebrities.
You and dozens of stars are accused of defrauding investors through veiled advertising and exposing them to potential financial losses.
Both prosecutors are themselves investors in the “Bored Apes Yacht Club” (in German: Bored Apes Jacht Club), also known as “BAYC” for short.
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Yuga Labs is behind the “bored monkeys”. Her crypto company’s NFTs consist of small works of art, with each of the primates having a unique design.
The virtual images were promoted by Paris Hilton (41), Justin Bieber, Gwyneth Paltrow (50) and Jimmy Fallon (48) among many others. Not altruistic though.
Because sometimes they invested in Yuga Labs or another company called MoonPay, which benefited from increased sales. The company’s services can be used to buy and manage NFTs as well as cryptocurrencies, Buissenes Insider reports.
The celebrities are said to have used their fame to advertise the “monkeys” and associated businesses. Being investors themselves, they had an increased interest in increasing the sales of these companies through advertising. At least according to court documents.
The problem: None of the stars have marked it as an advertisement, even though they should have done so and are supposed to violate the terms of “Securities and Exchange Commission” have violated. The SEC’s job is to prevent market manipulation.
What are NFTs?
NFTs are short for “Non-Fungible Tokens”. They are based on the same technology as cryptocurrencies, but have one key difference.
While anyone who wants to can buy different amounts of the same cryptocurrency, NFTs are unique, they are like virtual collectibles.
You can buy and sell them, i.e. trade with them.
The important thing is: Every NFT is unique!
Some of the stars had invested in the company – not the NFTs!
Justin Bieber announced last January that he had purchased a Bored Ape Yacht Club NFT for around $1.29 million.
In the court documents, the plaintiffs now allege that he received the virtual painting in exchange for promoting “BAYC” and did not pay for it. However, he never referred to it as an advertisement.
Gwyneth Paltrow also promoted the “digital monkeys”. Last February she publicly announced that she had become a member of BAYC. She acquired her artwork with the help of the company MoonPay.
However, the 50-year-old forgot to mention that she had invested money in MoonPay. So Paltrow promoted her own financial cause.
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According to a somewhat similar principle, all 37 celebrities are said to have advertised the virtual monkeys.
The unfair advertising may have enticed investors to hold onto their assets longer than they probably would have. This exposed them to the potential risk of losing a lot of money if Bored Ape Yacht Club goes down.
Cover Photo: Editing: KEVIN WINTER / GETTY IMAGES NORTH AMERICA / GETTY IMAGES VIA AFP, Lisa O’CONNOR / AFP, JON KOPALOFF / GETTY IMAGES NORTH AMERICA / GETTY IMAGES VIA AFP