NFT Lawsuit Targets Jimmy Fallon, Justin Bieber, and Other Celebrity Endorsements
NFTs have turned out to be a bad investment. Justin Bieber lost a small fortune on his NFT purchase, and the world at large has stopped buying digital assets. Now, The Hollywood Reporter reports that many high-profile celebrities like Bieber, Jimmy Fallon, and Gwyneth Paltrow, who promoted the most-popular NFTs, known as the bored ape yacht club, face lawsuits over their involvement.
According to the lawsuit, Yuga Labs’ entire business model revolved around using these celebrities to convince fans that buying an NFT would earn them money in the long run, since NFTs would only increase in price. But through some unforeseeable economic forces, it turned out that the price of officially owning a piece of digital art was not a savvy investment. The digital assets failed to appreciate, with the price of bored apes dropping by around 80% over the course of the year.
While the buyers ended up losing most of their money, the complaint says that the defendants gained billions of dollars through NFT sales.
The lawsuit claims that the company that created Bored Apes, Yuga Labs, conspired with promoter Guy Oseary to secretly pay a list of dozens of celebrities to promote the NFTs. Additional celebrities involved in this lawsuit include Madonna, Snoop Dogg, and Paris Hilton, who have allegedly failed to disclose the fact that they were paid to promote the failed investments.
Major sports figures were also named in the NFT lawsuit complaint, including Golden State Warriors guard Stephen Curry and tennis star Serena Williams. Several corporations, such as Adidas America, Universal Television, and Electric Hot Dog Inc. were also named.
The NFT lawsuit cites a statement by the U.S. Securities and Exchange Commission, which states that it’s unlawful for celebrities to encourage the promotion of stocks and other investments if they don’t disclose how they were paid to promote the assets. The suit argues that the celebrities were compensated under the table by another defendant, MoonPay USA LLC.
The result, the lawsuit claims, was a false impression that these celebrities became interested in NFTs organically. The lawsuit claims that this was far from the truth and that the celebrities were “highly compensated” for their promotion of the assets.
The celebrities promoted NFTs not only on social media but also on broadcast television. The complaint notes an incident in November 2021 where Jimmy Fallon interviewed digital artist Mike Winkelmann, better known as Beeple. In the interview, Fallon told Beeple that he bought an ape NFT using MoonPay — he claimed to have done so after he “did his homework” about crypto, but the lawsuit alleges that both Fallon and Beeple were being paid to promote the NFTs and the MoonPay platform on the show.
As a result of apparently being secretly paid to promote NFTs, the lawsuit has ten separate complaints against the defendants. including violation of the California Unfair Competition Law, violation of the California Consumers Legal Remedies Act, and Unregistered Offering and Sale of Securities.
It remains to be seen whether this lawsuit will be successful or, like previous NFT lawsuits against celebrities, it will end up getting dismissed.
