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

Times of financial crisis are rarely the most interesting and constructive. Except if you are in the camp of those who buy back other people’s risky investments at a low price. Because the tendency quickly turns into the greedy and aggressive search for responsible people, mostly other than oneself. Especially in the cryptocurrency sector as volatile as it is (almost) devoid of any centralized structures that would be possible to complain about. But no matter, because law firms offer to remedy this by launching risky collective actions. The latest against the Yuga Labs studio, responsible for the Bored Ape Yacht Club and the APE cryptocurrency.

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

It is also a dynamic on the back of many criticisms against the Yuga Labs studio responsible for this success story digital. Here it is about questionable acquaintances with a neo-Nazi-inspired iconography that is at times very disturbing. Or even in terms of the tokenomics of the APE cryptocurrency, very far from being as decentralized and Web3 as its promoters would have us believe. The latter is presented as independent of Yuga Labs, which would have adopted it only after its launch. An important detail for the rest of this case.

Yuga Labs – facing a class action lawsuit

This case apparently comes from the United States. This country where it is possible to file a complaint against almost any consequence of stupid behavior if there was no explicit warning not to do so. And between him diving into a swimming pool with 10 centimeters of water and this dog who died from being left to dry in a microwave is now the Yuga Labs studio. This is part of a class action lawsuit brought by the law firm Scott+Scott. And for the moment, of course, investors are looking to line up in the ranks of potential suitors. The goal: “to request reimbursement of the losses suffered during the purchase of Yuga Labs tokens and NFT”.

Investors in Yuga Labs were improperly incentivized to purchase financial products, namely ApeCoin and non-fungible 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 involves promoting growth prospects and changes for huge investment returns to unsuspecting investors.

Scott+Scott

A procedure that is still at the stage of a simple call proposal. Because no official complaint has yet been filed by Scott+Scott regarding this matter (if it actually exists). With the main workhorse is the ability to bring NFT tokens into the Securities and Exchange Commission (SEC) financial securities vault. This would mean a break on the part of Yuga Labs with respect to their previous registration in this US structure. But the exercise seems risky given the legal vagueness surrounding these non-fungible tokens at present.

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Yuga Labs – APE cryptocurrency in the sights

Reason why The Scott+Scott company is also attacking the APE cryptocurrency, launched in parallel with the Yuga Labs structure. However, the latter was simply “adopted” by the company, once launched in a way that was presented as autonomous. A little on the model of the CRV cryptocurrency in the Curve protocol, in August 2020. With this little air of not giving a hell about the world, everything stays at a sufficient distance not to risk legal consequences. As a class action lawsuit brought by an obscure law firm that visibly lacks significant information in the field…

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

Scott+Scott

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

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