Four investors who had put their money into the renowned NFT collection, Bored Ape Yacht Club (BAYC), have taken legal action against Yuga Labs, the project's originator, as well as 29 other associated enterprises.
The lawsuit alleges that these entities misleadingly promoted the collectibles, leading to a decline in their values.
As highlighted by CNN, among the parties named in the legal action are renowned art auction house Sotheby's Holdings, global sportswear brand Adidas, cryptocurrency payments company MoonPay, along with celebrities Justin Bieber and Paris Hilton.
The core accusation put forth by the plaintiffs is that Sotheby's collaborated with Yuga Labs to artificially boost the prices of BAYC NFTs.
Specifically, they cite Sotheby's sale of 100 collectibles to a sole purchaser for over $24 million in 2021.
The plaintiffs argue that this transaction was deceptive, asserting that Yuga Labs had partnered with the auction house to generate hype and attract investor interest in the collection.
On a different note, Bieber and Hilton are facing allegations of endorsing BAYC without disclosing their financial gains from the project.
Representatives of Hilton are further accused of feigning interest in the collectibles to reap financial benefits.
The lawsuit also targets Adidas, claiming the company was part of a plot to artificially inflate NFT prices through a scheme.
MoonPay, too, is accused of engaging in market manipulation.
The investors contend that Yuga Labs covertly employed MoonPay to compensate their "celebrity associates," thereby presenting the interest in the BAYC collection as genuine rather than the outcome of paid promotion.
In response, a spokesperson for Yuga Labs dismissed the allegations as lacking in substance.
Since this lawsuit is a revised edition of a complaint filed in December, the representative asserted that it's "opportunistic," much like its predecessor.
The Yuga Labs representative stated, "As a media and technology company, Yuga Labs has empowered strong communities of enthusiasts and entrepreneurs to innovate, connect, and build.
Their creativity has fostered community-driven projects that have captured the imagination of people around the world. That's the story worth telling."
Sotheby's strongly refuted the allegations, vowing to defend itself in court.
The plaintiffs are seeking a jury trial and damages exceeding $5 million as part of their claims.