US-based law firm Scott + Scott is attempting to organize a class-action lawsuit against Yuga Labs, the organization behind the popular non-fungible token (NFT) collections Bored Ape Yacht Club (BAYC), Mutant Ape Yacht Club (MAYC) and Other.
The lawsuit will allege that Yuga Labs “inappropriately promoted” BAYC and ApeCoin (APE), the collection’s native Ethereum (ETH) tokens, “encouraging” investors to purchase “products”. finance”, while both the collection’s floor price and the token’s value have both declined over the past three months, according to an announcement from the company.
The floor price of BAYC was at 153 ETH in early May. However, the floor price of the collection has since dropped to 87 ETH, down about 45%, according to nftpricefloor.com. Considering that ETH has also been affected over the past few months, the floor price of BAYC has been hit even harder in USD terms.
“YUGA LABS management has used celebrity promoters and validators to increase the price of NFT and the company’s token, generally [boosting] growth prospects and change to gain huge investment news for unsuspecting investors,” the announcement said.
It added that after selling “fraudulently advertised NFTs” worth millions of dollars, the company launched ApeCoin “to further fleece investors.”
“Once it was revealed that the touted growth was entirely dependent on continued advertising (as opposed to actual utility or underlying technology), retail investors were left with the tokens. announced has lost more than 87% of its inflated price on April 28, 2022,” the statement argued.
Notably, investors appear to have yet to file a formal complaint in federal court. Instead, Scott + Scott is working on bringing together plaintiffs who suffered losses after purchasing NFTs or Yuga Labs tokens.
“Individual investors of Yuga Labs are currently joining together through a class action lawsuit brought by law firm Scott + Scott, seeking compensation for losses incurred,” the firm said. from purchasing YUGA LABS tokens and NFTs”.
Meanwhile, some users noted that those who have suffered losses after purchasing NFTs or tokens related to Yuga Labs can join the lawsuit to compensate for their damages.
“I predict yuga holders will engage in actions like this to recover the money they’ve been scammed.. unless of course they hate money?” artist Ryder Ripps said in a tweet.
At 9:50 UTC on Monday morning, APE traded at $6.37, down 3.7% in a day and up 27% in a week. It is also down 76% from its all-time high in April 2022.
Just earlier this month, another class-action lawsuit was filed in California federal court accusing major parties in the Solana ecosystem (SOL), including Solana Labs, Solana Foundation and Solana co-founder Anatoly Yakovenko, with others, violating securities laws by launching unregistered security.