Yuga Labs may be sued for using celebrities to inflate the price of NFTs

 According to the website of international law firm Scott & Scott , it is possible that non-fungible token (NFT) company, Yuga Labs could be sued in a class action lawsuit due to the way it discloses and promotes its tokens.

Takeaways : 

• Law firm Scott & Scott claims that investors were left with deep losses as the company “inappropriately induced” investors to buy their NFT collection. 
• Last year, the company sold an NFT for $3.4M, while this year, as the crypto industry got hit with a downturn, a BAYC NFT sold for $115,000, down from $450,000 three months ago. 
• Lawyers argue that the company’s growth was based on continued promotion instead of utility or underlying technology. Retail investors were left with tokens that lost over 87% of their value since April 28, 2022.

The law firm is involved in several “crypto-asset cases?

The office details that Yuga Labs is accused of using “promoters and celebrity endorsements to inflate the price of the company’s tokens and Les NFTs.”

However, as of this writing, current court records show that no formal class action lawsuit has been filed against Yuga Labs.

Scott&Scott’s website states that the company is currently seeking investors who “suffered losses related to the purchase of tokens or NFTs from Yuga Labs between April 2022 and June 2022.”

The token cited in the allegations against Yuga Labs is Apecoin (APE)a crypto asset associated with Bored Ape Yacht Club (BAYC) and the Otherside Metaverse Project.

After selling millions of dollars in fraudulently promoted NFT, yuga labs launched ape coin to attract even more investors,” scott&scott’s website reads.

Once it was revealed that the touted growth depended entirely on ongoing promotion (as opposed to actual utility or underlying technology), retail investors were left with tokens that lost more than 87% of their inflated price as of april 28, 2022.

The law firm’s website adds:

As a result, individual yuga labs investors are now joining together through a class action lawsuit filed by the law firm of scott + scott, seeking restitution for losses suffered when they purchased yuga labs and nft tokens.

If you suffered losses related to the purchase of tokens or nft from yuga labs between april 2022 and june 2022, we encourage you to contact scott&scott for more information about your legal rights.

The office covers many different legal processes and complex litigation in Europe and the United States.

Scott&Scott has been involved in securities litigation involving high-profile names such as Edison International, General Mills, Intuit, Roblox Corporation, Tesla, Transunion and Twitter.

The firm’s website states that the law firm is involved in several “crypto-asset cases.”

Other legal cases involve crypto-companies and projects such as Celsius, Ethermax, Safemoon, Solana Labs, Terra and the latest cryptocurrency case listed is Yuga Labs.

Yuga Labs did not mention the resulting allegations and the company’s latest tweet mentioned a threat to the NFT community.

Our security team is tracking a group of persistent threats targeting the NFT community, Yuga Labs tweeted on July 18,2022.

We believe they will soon be able to launch a coordinated attack targeting multiple communities through compromised social media accounts. Be vigilant and stay safe.