A proposed class-action lawsuit alleges that Yuga Labs “inappropriately induced” the community to buy Bored Ape Yacht Club nonfungible tokens (NFTs) and the project’s affiliated ApeCoin (APE) token.
The proposed class-action driven by law firm Scott+Scott was published on Thursday, claiming that Yuga Labs used celebrity promoters and endorsements to “inflate the price” of the BAYC NFTs and the APE token.
It also alleges that Yuga Labs promoted the growth prospects and chance for huge returns on investment to “unsuspecting investors:”
“After selling off millions of dollars of fraudulently promoted NFTs, YUGA LABS launched the Ape Coin to further fleece investors.”
“Once it was revealed that the touted growth was entirely dependent on continued promotion (as opposed to actual utility or underlying technology) retail investors were left with tokens that had lost over 87% from the inflated price high on April 28, 2022,” it added.
The law firm is currently seeking impacted investors who suffered losses on BAYC NFTs and Apecoin between April and June of this year.
During this timeframe, APE surged to its all-time high of $26.70 before dropping roughly 82.5% to $4.66 at the end of June, while the floor price went from 151.5 Ether (ETH) down to 92.9 ETH.
So there’s a class action lawsuit against @yugalabs as investors were “inappropriately induced to buy financial products created by Yuga Labs”.
Extremely ridiculous Take responsibility for your own actions people. https://t.co/WeuVVLNGv6 pic.twitter.com/7c9Jywvv9V
— Kevin Wu (@kevwuzy) July 24, 2022
The community seems to be relatively unfazed by the proposed lawsuit, with BAYC hodler SoapBoxCar suggesting via Twitter on Sunda that a bunch of people are mad they bought at the top and “got rekt.”
User briann6211 also highlighted an interesting point in that Yuga Labs “never created a token… Apecoin DAO created a token which was then adopted” by the firm. Several members also noted that the Apecoin tanked after a free airdrop to BAYC…