Proactive Investors - Comedian Kevin Hart, tennis champion Serena Williams and rapper Snoop Dogg have been named in a class action lawsuit that accuses them and other celebrities who endorsed Bored Ape Yacht Club non-fungible tokens (NFTs) of misleading their followers into buying the NFTs to artificially inflate their value.
Ultimately, this led to buyers purchasing “losing investments at drastically inflated prices", according to the lawsuit.
The class action lawsuit has been filed in California federal court against Yuga Labs, the parent company of Bored Ape Yacht Club.
Adonis Real and Adam Titcher, the two plaintiffs who filed the complaint on 8 December, are seeking US$5mln for themselves and others affected.
The lawsuit states that celebrities, including musician The Weeknd and NBA star Stephen Curry, were recruited to endorse the NFTs by talent manager Guy Oseary.
Oseary allegedly worked with Yuga Labs to pay celebrities for their endorsements via a crypto firm called Moonpay.
Yuga Labs said: “In our view, these claims are opportunistic and parasitic. We strongly believe that they are without merit, and look forward to proving as much.”
Demand for NFTs had rocketed late last year, with the digital artworks viewed as a store of value for the elite.
However, demand for and price of NFTs have collapsed over the past 12 months.
The floor price of a Bored Ape NFT was as high as US$430,000 in April, although it wasn’t uncommon for them to be sold for above US$1mln.
Now, the floor price, that being the lowest cost of an item, is closer to US$86,000.