Yuga Labs Accused Of Pumping/Dumping BAYC NFTs and ApeCoin: Class Action Lawsuit

Law firm Scott+Scott proposed a lawsuit against Yuga Labs, accusing the company of using a pump-and-dump scam with Bored Ape Yacht Club non-fungible tokens (NFTs) and ApeCoin (APE) tokens.

The lawsuit alleges that Yuga Labs used promoters and celebrity endorsers to “jack up the price” of BAYC NFTs and APE tokens. It is also alleged that Yuga Labs touted growth prospects and the chance of a huge return on investment for its investors:

“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”.

So far, the law firm is looking for affected investors who suffered losses from BAYC NFT and ApeCoin between April and June 2022.

During this period, the price of the APE token jumped to its all-time high of $26.70 before falling by about 82.5% to $4.66 at the end of June. As for BAYC NFTs, the minimum price has decreased from 151.5 ETH to 92.9 ETH.

If the lawsuit goes to court, Scott+Scott’s lawyers will have to prove that Yuga Labs and its famous promoters withheld information about paying for advertising when they were required by law to disclose it.

In addition, since the law firm also claims that a pump/dump scheme was used, it will also need to prove this in court, which can be problematic given the strength of Yuga Labs’ projects.

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