Remember earlier this year when Paris Hilton and Jimmy Fallon tormented us with 77 seconds of nonsense (opens in new tab) about Bored Ape's NFT?

Now, as 2022 draws to a close, that prediction may be at least indirectly coming true. Fallon, Hilton, and others who have used celebrities to promote NFT are facing a proposed class action lawsuit accusing them of fraud; the list of defendants in the suit, available via The Hollywood Reporter (opens in new tab), is long to say the least: Reddit co-founder Alexis Ohanian, Madonna, Justin Bieber, Gwyneth Paltrow, Serena Williams, Post Malone, Snoop Dogg, Kevin Hart, Stephine Currie, DJ Khaled, Adidas, and other names you may not recognize, and of course Yuga Labs, the parent company of Bored Ape Yacht Club, is also included.

"We present the Bored Ape ecosystem as a brand that is organically loved by some of the world's most famous celebrities. However, our entire business model is based on the use of insidious marketing and promotional efforts by highly compensated A-list celebrities (without disclosing as such) to encourage potential private investors to purchase these digital assets at inflated prices and as members of a "club," these investors are given additional The reality is that they rely on increasing demand for Yuga securities by convincing them that they have exclusive access to financial products and privileges.

The lawsuit alleges that all of Bored Apes' actions over the past year have in fact been designed to help the ultra-rich and famous purchase NFTs from Yuga Labs, Guy Oseary, a "very well-connected Hollywood talent agent," and MoonPay, "a It is alleged to have been a "massive scheme" between companies "posing as white glove services," but which, according to the lawsuit, was actually a "secret way to compensate the Promoter Defendants" without disclosing it to investors.

Not surprisingly, the scheme worked: the endorsement increased interest in and the price of the Bored Ape NFT and "caused investors to purchase this losing investment product at a significantly inflated price," the lawsuit claims.

The bulk of the suit stems from MoonPay, an NFT acquisition service in which numerous defendants had previously invested. For example, the lawsuit alleges that there was a scene on "The Tonight Show" in November 2021 in which host Fallon announced his first NFT purchase through MoonPay during an interview with NFT artist Mike "Beeple" Winkelman The lawsuit alleges that Fallon and Winkelman were actually "solicited and compensated" to promote MoonPay and Bored Apes during the program. It also states that Winkelman is a "direct business partner" with Oseary, a major talent agent at another NFT firm.

"Fallon failed to disclose that he had any financial interest in Moonpay or any direct or indirect financial interest in the increased sales and popularity of Yuga Securities," the suit alleges. "In addition, EHD (Electric Hot Dog, Fallon's production company) and Universal have failed to disclose that this purportedly organic segment of the Tonight Show is actually a business partnership of both Yuga and MoonPay's investor (Oseary), two celebrities (Fallon and Winkelmann)) that it is a paid advertisement for NFTs and MoonPay's BAYC collections, without disclosing that it is a paid advertisement for NFTs and MoonPay's BAYC collections. [Hilton and MoonPay intentionally failed to disclose Hilton's direct financial interest in MoonPay and the related increase in sales of Yuga securities through MoonPay," the complaint states. And there was also no disclosure from either of the Tonight Show production companies, i.e., defendants Universal or EHD, regarding Hilton's and/or Fallon's financial interest in MoonPay or their compensation for promoting BAYC NFT."

The lawsuit makes various allegations against other defendants: e.g., Gwyneth Paltrow announced in January 2022 that she "joined" the Bored Apes Yacht Club and thanked MoonPay for their services, but that she was a MoonPay investor and thus "Yuga She stated that she did not disclose that she had a "vested interest in the sale of securities. Both Bieber and Madonna allegedly received hefty NFTs in exchange for promoting Yuga and/or MoonPay. They are also linked to the FTX cryptocurrency exchange that failed so badly in November.

Yuga Labs denied the claims in a statement sent to The Hollywood Reporter. 'In our view, these claims are opportunistic and parasitic. We strongly believe that these claims have no merit."

Interestingly, a few years ago, in response to the CS:GO influencer gambling scandal (opens in new tab), the FTC issued updated disclosure guidelines for influencers (opens in new tab). With that in mind, this might seem like a pretty open case if the lawyers can prove that there was some sort of payment, direct or indirect, in exchange for the promotion. But there is a long way to go before this lawsuit proves anything: at this point, the law firm leading the case is seeking approval to pursue the matter as a class action.