As NFTs become increasingly popular with the public, "PR tricks" from the traditional market are also introduced. Recently, Yuga Labs and MoonPay were involved in a lawsuit related to leveraging "advertising KOLs" to benefit their products.
California law firm Scott + Scott has filed a class action lawsuit against nearly 40 people and companies, including Yuga Labs and MoonPay. The lawsuit accuses these parties of being part of a "grand scheme" to exploit the credibility of celebrities for "profiteering." The identities of the celebrities were not disclosed.
According to Scott + Scott, Yuga Labs and Hollywood artist management company Guy Oseary devised a plan to leverage "an extensive network of musicians, A-list athletes, celebrity clients and associates to make false advertisements and sell Yuga Labs financial products."
Financial products here include the most famous NFT Bored Ape Yacht Club (BAYC) in the digital arts community.
MoonPay's role in this "scheme" is to be used to pay advertisers without having to declare finances to investors. As a result, the lawsuit claims the defendants were able to "push the price of NFT BAYC to a "virtual increase" during the promotion period, causing investors who bought NFTs to suffer losses."
This lawsuit is once again a wake-up call for the current rampant state of advertising and "dirty PR". With the influence of celebrities and KOLs, it is not uncommon for investors to be easily "drafted" to buy NFTs or tokens. Even a global A-list star like Kim Kardashian has been fined $1.26 million by the SEC for illegally promoting crypto.
In particular, this lawsuit is not only related to celebrities but also related to NFT companies themselves. If the above allegations are true, both Yuga Labs and MoonPay have taken advantage of celebrity advertising to sell unwarranted products.