- Law firm Scott+Scott accused Yuga Labs of promoting growth prospects by promising huge returns to “unsuspecting investors”.
- The Yuga Labs community remains unfazed by the lawsuit saying that Yuga Labs never created a token in the first place.
Last week, the law firm Scott+Scott filed a class-action lawsuit against Yuga Labs, the creator of the popular Bored Ape Yacht Club (BAYC) NFTs. The law firm noted that Yuga Labs “inappropriately induced” investors to buy the non-fungible tokens for Bored Ape Yacht Club (BAYC) and projects associated with the ApeCoin tokens.
Scott+Scott said that it filed this lawsuit on behalf of all individual investors. It says that Yuga Labs wrongly promoted the growth prospects and chance for huge returns on investment to “unsuspecting investors”. The official announcement:
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.
Scott+Scott has said that investors who suffered losses due to the purchase of YUGA LABS tokens and NFTs between April 2022 and June 2022, can reach out to the law firm for any legal assistance.
But during this timeframe, the APE token price surged all the way to $26.70, before dropping roughly 82.5 percent to $4.66 by the end of June. Similarly, the floor price tanked from 151.5 Ether (ETH) down to 92.9 ETH.
Yuga Labs community remains unfazed from charges
The recent lawsuit from Scott+Scott comes as a surprise, however, the Yuga Labs community remains unfazed. On Sunday, July 24, BAYC hodler @SoapBoxCar told that a bunch of people are mad for buying the tokens at the top and getting rekt.
Another user @briann6211a point that Yuga Labs “never created a token… Apecoin DAO created a token which was then adopted”. Some users also pointed out that APE price tanked after a major airdrop to BAYC holders. On the other hand, the broader market was also suffering from a major downturn at that time.
Thus, if the lawsuit moves to court then the law firm Scott+Scott will have to prove that Yuga Labs and its celebrity promoters failed to disclose their paid advertisements. Besides, the law firm will also need to prove that Yuga Labs engaged in a pump and dump as alleged by them. This could be difficult considering the popularity of Yuga Labs projects.
Considering BAYC and APE NFTs, Scott+Scott will need to prove that Yuga Labs promoted them as investment contracts as unregistered securities. Earlier in March, Yuga Labs faced accusations of market manipulation following its purchase of CryptoPunks and Meebits collections.