📍 Las Vegas, NV, USA. on 23rd Oct 2022 at 00:00
1 min read
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A lawfirm alleges Yuga Labs, the $4 billion startup that created the Bored Ape Yacht Club (BAYC) NFT collection, unjustly inflated the price of its crypto assets and caused substantial losses for investors -- and wants to speak to people who purchased either an NFT or ApeCoin.
According to a letter from the law firm Scott+Scott, investors may have been "inappropriately encouraged" to purchase the company's non-fungible tokens (NFTs) and its native coin, ApeCoin.
Lawyers assert that Yuga Labs overpromised high profits in order to "inflate" the price of its NFTs by using celebrity promoters and sponsorships.
Musician Snoop Dogg, football player Tom Brady, and influencer Paris Hilton are just a few of the famous people who own and have endorsed the Bored Apes in a number of different ways. Late last year, BAYC sold its most expensive digital piece for $3.4 million.
Prices for NFTs and crypto assets have recently fallen as a result of the general slump in the financial markets. NFT Stats data shows that the average price of a BAYC NFT sold over the last seven days is presently $115,000, down from almost $425,000 three months ago.
In the first quarter of 2022, Yuga Labs introduced ApeCoin on the Ethereum blockchain, with the goal of powering its forthcoming metaverse environment: The Otherside. But Scott+Scott criticized the company's decision to launch a coin that focuses on the community. Yuga Labs developed ApeCoin to further defraud investors after selling off millions of dollars' worth of falsely advertised NFTs, according to attorneys.
The lawfirm continued: "Retail investors were left with tokens that had lost over 87 percent from the inflated price high on April 28, 2022, once it was discovered that the growth that had been touted was entirely dependent on continued promotion (as opposed to actual utility or underlying technology)."
Individual investors who suffered losses from their Yuga Labs-related investments between April and June of this year are being urged by Scott+Scott to join a potential class action. The company has not formally responded to the investigation via their social media platforms.
The move comes after a set of attacks on the Ape community, cumulating in major losses for NFT holders. A June 2022 attack on the Bored Ape Yacht Club Discord server ended with over $354,000 in losses, including 32 NFTs and 145 in Ethereum.