- The Scott-Scott law firm seeks to file a class action lawsuit against Yuga Labs, accusing the firm of having “improperly induced” the community to acquire Bored Ape Yacht Club NFTs and the ApeCoin token (APE).).
- The lawsuit alleges that Yuga Labs used reputable promoters as well as sponsorships to “inflate the price” of the BAYC collection and ApeCoin, the platform’s native token.
- The firm is seeking investors who suffered losses in association with the purchase of Yuga Labs tokens or NFTs between April 2022 and June 2022.
The world of finance can be a wheel of fortune, as sometimes you are down and sometimes you are up, as in the recent case of YugaLabsthe $4 billion dollar company responsible for the collection of NFTs, Bored Ape Yacht Club (BAYC), which has been the creditor of several headlines in recent weeks, either due to hacks or being involved in lawsuits.
One of the lawsuits that drew the most attention was the one filed on June 24 in which Yuga Labs sued artists Jeremy Cahen and Ryder Ripps for trademark infringement.
However, currently the crypto firm may go from plaintiff to defendant. This is because the law firm Scott +Scott is seeking to file a class action lawsuit accusing the non-fungible token company of having “improperly induced” the community to acquire Bored Ape Yacht Club NFTs and the ApeCoin (APE) token.
Scott+Scott seeks affected investors
The class action proposal was published on July 21 and it states thate Yuga Labs used renowned promoters in addition to sponsorships to “inflate the price” of the BAYC collection and ApeCoin, the platform’s native tokenthat is, it falsely promoted NFTs as securities with guaranteed returns, but with a price that has plummeted in the last three months.
There is currently no official class action case against the company, which is why the Scott+Scott website noted that the firm is seeking investors who “suffered losses in association with the purchase of Yuga Labs tokens or NFTs between April 2022 and June 2022.”
“After selling millions of dollars in falsely promoted NFTs, Yuga Labs launched Ape Coin with the intention of attracting more investors”, notes the Scott+Scott website. “Once it was revealed that the promoted growth was dependent on continued promotion, retail investors were left with tokens that had lost more than 87 percent since the inflated price high on April 28, 2022.“.
Also, on the firm’s website it is pointed out because of this scam, today individual investors of YugaLabs are organizing to launch a class action lawsuit supported by their legal counsel with the firm objective of seeking restitution for their money lost due to the acquisition of Yuga Labs tokens and NFTs
As relevant data, it should be noted that in this period, APE managed to reach its historical maximum of $26.70 dollars, before presenting a resounding drop of around 82.5 percent, trading at $4.66 dollars at the end of June, while its minimum value it went from 151.5 ETH to 92.9.
What if it goes to court?
To gather the necessary people and manage to file a formal lawsuit in court, the law firm Scott+Scott will have to prove that Yuga Labs, like its promotersthey did not publicize their paid advertisements, as they are legally required to do so.
Likewise, since the law firm indicated that a pump and dump occurred, it must prove that the crypto firm was part of said actions, something that apparently has a high degree of difficulty, due to the strength of the Yuga projects. Labs.
Something of great relevance for the lawsuit to be victorious is the determination of the court, that is, if it indicates that the non-fungible tokens are securities, similar to a share of a company whose value could appreciate.
Therefore, in the event that the authorities take this possibility for granted, that is, that the NFTs are securities, then Yuga Labs can support the fact that the firm did not comply with the necessary disclosure and registration obligations, which accompany to the offer of securities.
However, due to the circumstances of the current landscape, that may be a distant possibility.
“VI have a very, very, very little chance that the SEQ wants to intervene and… characterize that [colección NFT de Bored Ape] as a value”, said the professor of law at the University of Kentucky, Brian Fyre. “I think they’re going to fight that tooth and nail, because that would open up a huge can of worms for them and force them to regulate all sorts of other things that they don’t want to regulate.”.
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