Yuga Labs (BAYC) accused of abusing ‘unsuspecting investors’

Periods of financial crises are rarely the most interesting and constructive. Except when one is in the camp of those who buy back the risky investments of others at a low price. Because the tendency quickly turns into the greedy and aggressive search for responsible people, usually others than themselves. Particularly in the cryptocurrency sector that is so volatile as to be (almost) devoid of any centralized structures with which it would be possible to complain. But that doesn’t matter, because law firms offer to remedy this by initiating risky class actions. The latest news from the Yuga Labs studio, responsible for the Bored Ape Yacht Club and the APE cryptocurrency.

The Bored Ape Yacht Club (BAYC) project has been around since its inception the symbol of the euphoria that has gripped the NFT token sector. With a bottom price that remains unperturbed above 85 ETH (about $130,000), while their selling price was below $100. And a hyperactive development dynamic that has seen the emergence of the APE cryptocurrency and more recently the Otherside metaverse. Every time with real success.

A dynamic that also at the origin of much criticism of the Yuga Labs studio, which is responsible for this success story digital. This is about dubious acquaintances with a neo-Nazi-inspired iconography that is sometimes very disturbing. Or relative to the tokenomics of the APE cryptocurrency, far from as decentralized and Web3 as the initiators would have us believe. The latter presented as independent of Yuga Labs, who would have adopted it only after launch. An important detail for the rest of this case.

Yuga Labs – Facing a class action

This case is clearly from the United States. This country where it is possible to file a complaint against almost all consequences of stupid behavior, if there was no explicit warning not to do so. And between the one that plunged into a pool with 10 inches of water and this dog that died from drying in a microwave is now Yuga Labs’ studio. This is part of a class action initiated by the law firm Scott+Scott. And for the time being, of course, looking for investors to join the ranks of potential claimants. Its purpose: “Request refund of the losses incurred during the purchase of Yuga Labs tokens and NFT”.

Investors in Yuga Labs were inappropriately encouraged to buy financial products, namely ApeCoin and non-replaceable Bored Ape Yacht Club (“NFT”) tokens. Yuga Labs management used celebrities and endorsements to drive up the price of the company’s NFTs and tokens. This usually by promoting growth prospects and changes for a huge return on investment to unsuspecting investors.

Scott+Scott

A procedure that is still at the stage of a simple recruitment proposal. As no official complaint has yet been filed by Scott+Scott in the context of this case (if it actually exists). With the main workhorse being the ability to bring NFT tokens into the Securities and Exchange Commission (SEC) financial securities box. This would constitute a violation of Yuga Labs’ previous registration with this US structure. But the exercise seems risky, given the legal vagueness surrounding these non-fungible tokens at the moment.

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Yuga Labs – APE cryptocurrency in the crosshairs

Reason why the Scott+Scott firm also attacks the APE cryptocurrency, which was launched in parallel with the Yuga Labs structure. However, the latter was simply “adopted” by the company once launched in a way presented as autonomous. A bit on the model of the CRV cryptocurrency of the Curve protocol, in August 2020. With this little air that you don’t care about the world, everything keep a sufficient distance so as not to risk legal consequences. Like a class action launched by an obscure law firm that clearly lacks vital information in the field…

After selling millions of fraudulently promoted NFTs, Yuga Labs launched ApeCoin to attract more investors. When it turned out that the advertised growth was entirely dependent on continued promotion (as opposed to actual utility or underlying technology), retail investors were left with tokens that had lost more than 87% of their value compared to the high price of April 28, 2022.

Scott+Scott

However, there is no doubt that this procedure can find some motivated investors. In an effort to recover some or all of the 76% – at the time of writing this article – of the losses posted by the APE cryptocurrency since the April 28, 2022 ATH ($26.70). But with only one real question: who is abusing whom in this story? Lawyers from the Scott+Scott firm, suggesting that it might be possible to gain something in this class action’s map. Or Yuga Labs, which sold NFTs that have become emblematic and “suffered” with the launch of a simply adopted cryptocurrency. This without ever presenting anything but the possibility of a rise that might as well become relevant again. You have two hours…

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