Four investors who bought NFTs from the Bored Ape Yacht Club collection are suing project creator Yuga Labs and one of the oldest auction houses, Sotheby’s, accusing them of promoting tokens whose value has fallen significantly.
Investors have accused Sotheby’s of colluding with developer Yuga Labs to artificially inflate the price of non-interchangeable BAYC tokens.
This created a stir and increased investor interest in the collection, the lawsuit states. In 2021, Sotheby’s sold one hundred collectibles to one buyer, which cost that buyer $24 million.
Now the minimum price of the BAYC collection is 24.4 ETH (about $40,796), down 66% from a year ago.
According to the complaint, sportswear company Adidas was also part of the scheme, influencing the BAYC collection token rate.
Cryptocurrency payment service MoonPay has also been accused of market manipulation. Investors allege that Yuga Labs secretly used MoonPay to make payments to celebrities.
The class action lawsuit includes Canadian singer Justin Bieber and American movie actress Paris Hilton. Plaintiffs allege that Defendants misled investors by advertising “bored monkeys” from the BAYC collection. While not disclosing the financial benefit of the project.
A spokesman for Yuga Labs said the allegations against the company are baseless, calling the class action an amended version of a complaint filed with the court last December.
As a media and technology company, Yuga Labs has provided crypto-enthusiasts the opportunity to innovate and communicate with each other, according to a spokesperson.
Auction house Sotheby’s also found the allegations lacking in merit and said it was prepared to defend itself in court.
Earlier this year, Yuga Labs won a case against artist Ryder Ripps, who created the alternative NFT collection BAYC.
The court agreed with Yuga Labs that the appearance of RR/BAYC was a deliberate attempt to harm the company through confusion.