Yuga Labs is receiving the blame for instigating the non-fungible token (NFT) community to invest in Bored Ape Yacht Club (BAYC) collection and its native token ApeCoin (APE). A lawsuit has been drafted to this effect by Scott +Scott, an international legal firm which focuses on complex litigation processes.
After the crash of the ApeCoin, the affected Yuga Labs investors assembled to form a class action suit propelled by Scott+Scott. Currently, they are seeking reimbursement for the losses incurred. According to the report posted on the legal team’s website, the investors were inappropriately induced by Yuga Labs to purchase the NFTs.
The financial products developed by Yuga Labs were promoted by top brands and celebrities to appeal to the masses.
The collaboration between two American music icons to make a Bored Ape music video is suspected to be one of the stunts pulled by Yuga Labs. American rap artists Snoop Dogg and Eminem collaborated to shoot a music video featuring the BAYC NFTs. Music posters displaying the rappers as Bored Ape characters were featured.
With all of these promotions, and brand endorsement, Yuga Labs was able to increase the price of the Bored Ape NFTs by projecting a growth prospect for the token. The unsuspecting investors were made to believe that their investments will yield huge returns.
Yuga Labs Investors Count Their Losses
After many investors had plunged into the NFTs and invested millions of dollars, the ApeCoin was introduced.
Again, investors flooded the native token and injected their funds. Only after that was it revealed that the growth of their investment is dependent on consistent and continued promotions. Meanwhile, the investors had been made to believe that the underlying technology will be responsible for its future growth.
In the end, the BAYC NFT and its native Ethereum-backed token guaranteed securities that failed to deliver on their promised returns. As a result, most individual investors lost their investment up to about 85%. Scott+Scott is still encouraging other affected investors who are interested in joining the movement against Yuga Labs to contact them.
The lawsuit is yet to be filed as an official complaint in a federal court as at the time of this writing. When it finally gets to the federal court, Yuga Labs may be indicted if the BAYC NFTs are graded as securities.