Yuga Labs has been threatened with a lawsuit for “fraudulently promoting” Bored Ape Yacht Club (BAYC) and ApeCoin. The law firm is representing investors who purchased the assets between April and June.
BAYC creator Yuga labs is facing a lawsuit, according to a notice by law firm Scott+Scott. The firm published the notice saying that “Yuga Labs investors were inappropriately induced to buy financial products,” namely Bored Ape Yacht Club and ApeCoin.
Individual investors have banded together to file the lawsuit against Yuga Labs, and the lawsuit states the leadership used celebrity promotions and endorsements to inflate the price of non-fungible tokens (NFTs) and the ApeCoin token.
It even says that it had sold millions of dollars of “fraudulently promoted NFTs,” with ApeCoin being a further attempt to “fleece” investors. These investors say they had lost over 87% of their investment since April 28.
The law firm has asked investors to reach out to them if they have also suffered losses in the acquisition of said assets between April and June. The complaint has not yet been filed in court, and the firm has not offered more details apart from the notice on its website.
It will be interesting to see how this case develops, as the court is likely to make a remark about whether the NFTs are securities. Whatever that outcome is, it will have a huge impact on how NFTs are viewed.
This is not the first lawsuit that Yuga Labs has been involved with. The company has also filed a lawsuit of its own, against a well-known artist that it says committed trademark infringement.
Meanwhile, Yuga Labs marches on
Yuga Labs is currently in the midst of several initiatives, and its BAYC NFT collection continues to make headlines for marketing and exposure efforts, including a music video featuring Eminem and Snoop Dogg. A BAYC NFT was recently sold alongside a bottle of champagne, the first of its kind.
The Otherside metaverse is one of the biggest developments that the company is working on, but the recent market crash has affected that sharply. Otherside NFT sales hit new lows in June, with the average sale value going from $22,000 to $6,000.
Yuga Labs will continue to make headlines, being the most popular name in the NFT space. The niche has slowed down in terms of growth these past few months, but it does still maintain a certain level of popularity.
Second half of year could be tougher for NFTs
NFTs took the world by storm earlier this year, but the remainder of the year may be less fruitful. The market crash has tanked the values of many sales volumes, including the Doodles NFT collection. NFTs are also coming under regulatory scrutiny.
One Latvian NFT artist’s earnings, totaling millions of dollars, were recently seized over allegations of money laundering. The U.S. government has also said that government officials publicly declare NFT holdings.