Steph Curry Sued For Promoting Bored Ape Yacht Club in Wake of FTX Collapse, Facing Second Class-Action Suit
Golden State Warriors guard Stephen Curry is being sued in a class action lawsuit, along with a slew of celebrities for promoting the popular Bored Ape Yacht Club NFT in commercials and on social media.
This is the second time Curry is being sued following the fall of FTX. This lawsuit is regarding the basketball player’s promotion of the NFT series Bored Ape Yacht Club. Curry’s alleged role as an investor and promoter could play a role in determining his potential liability.
The Ape collection has 10,000 Bored Ape NFTs, with different designs, features and traits. It exists on the Ethereum blockchain.
The recent action was filed in the U.S. District Court for the Central District of California by investors who purchased or acquired the securities of Yuga Labs, which created the NFT series BAYC. The class action suit targeting Yuga and its celebrity endorsers claims that investors have been damaged by the company.
On Nov. 13 the price of the ApeCoin Token hit a low of $2.70, and has not been able to recover after allegedly dropping more than 90% in value.
The complaint alleges that the company and its celebrity endorsers made “false and misleading statements” and that the promotions by celebs were designed to “lure in unsuspecting investors so Yuga insiders could sell the unregistered Yuga securities in violation of the Securities Act.”
The suit further claims that the exclusiveness of membership in the BAYC club was “based on inclusion and endorsements of highly influential celebrities,” and promised access to exclusive benefits and events.
The complaint claims that Ape DAO board member Amy Wu, who had just led FTX Ventures until November, allegedly utilized her relationship at the crypto exchange at FTX to recruit Curry to solicit the sales of the BAYC collection.
In February, Curry was shown brushing the flakes off of a Bored Ape sculpture in a FTX commercial. This commercial was posted on FTX’s Twitter. The plaintiffs in the suit now claim that the promotion featuring Curry was created to encourage people to purchase and continue to hold Yuga securities. The plaintiffs also state that Curry’s involvement in FTX and Youtube is allegedly problematic.
The Bored Ape NFT is one of the first prominent NFT collections to be a major success. As an individual NFT item, it set records by selling for millions of dollars after it was created in April of 2021. BAYC items have more than $2.5 billion in sales which does not include spinoffs. Curry allegedly paid $180,000 for the No.7990 unit of this NFT line. He displayed it on his personal Twitter and allegedly sent a picture with it in the BAYC Discord group chat. Curry has reportedly also purchased a Rumble Kong NFT for $30,000. Curry launched his own NFT collection on the FTX platform, with profits all going to an Oakland nonprofit.
The most expensive Bored Ape NFT sold for $3.4 million, according to BlockGeeks.
Considering FTX’s recent bankruptcy, nobody completely knows or understands how this will impact NFT holders’ access to purchased items on exchanges.
Curry isn’t the only celebrity listed as a defendant. Celebrities such as Jimmy Fallon, Madonna, Paris Hilton, Snoop Dogg, Gwyneth Paltrow, Justin Bieber, and Serena Williams are all named as well. Each of these individuals allegedly acted as company promoters who helped solicit the sale of Yuga securities to the public.
Curry was recently sued along with Tom Brady and other celebrities for promotional ties to FTX and are now allegedly being scrutinized as part of a larger investigation into the cryptocurrency platform’s operations by The Texas State Securities Board.
The investigation is allegedly centered around possible securities-law violations by the company which is now facing bankruptcy.
“Anyone who renders investment advice in Texas typically needs to be registered and they typically have to truthfully disclose all known material facts,” said Joe Rotunda, director of enforcement at the Texas State Securities Board, to the Tribune. “In Texas, there is not a different system of justice or regulation for people who are celebrities.”
The class-action suit that set off the investigation, names Curry and Brady, the Warriors and other celebs . It was filed in Florida last week and seeks $11 Billion in damages.
The lawsuit claims the celebs and FTX CEO “either controlled, promoted, assisted in, and actively participated” in the alleged scheme where they “aggressively marketed” FTX. The filing called FTX “truly a house of cards, a Ponzi scheme where the FTX Entities shuffled customer funds between their opaque affiliated entities, using new investor funds obtained through investments in the YBAs and loans to pay interest to the old ones and to attempt to maintain the appearance of liquidity.”
Just last week, a federal judge in Los Angeles dismissed a case involving claims against Kim Kardashian, Floyd Mayweather and other celebrity promoters of EthereumMax, a cryptocurrency company. The judge dismissed it on the grounds that investors should act responsibly before basing their bets in the moment.