Yuga Labs, the company behind the widly popular NFT collection Bored Ape Yacht Club (BAYC) is being sued in a proposed class action.
On 21st July 2022, law firm Scott + Scott issued a publication stating that Yuga Labs investors were inappropriately induced to buy their BAYC NFTs. In particular, Yuga Labs is accused of using celebrities to inflate the price of their NFTs and ApeCoin ($APE) token. Also, Yuga Labs had promoted that the NFT had growth prospects and opportunities for huge returns to unsuspecting investors.
The publication then goes on to state that after millions of dollars of BAYC NFTs were sold, Yuga Labs launched their Ape Coin ($APE) in order to further fleece investors. Finally, once it was discovered that value of the NFTs was solely based on celebrity promotion (and not actual utility), retail investors were left holding $APE tokens that had lost over 87% of their value since its peak on 28th April 2022.
The publication concludes with an invitation for any other investors of Yuga Labs to contact Scott + Scott to join in the class action. The class action intends to claim restitution for losses suffered as a result of purchasing Yuga Labs’ tokens and NFTs.
What is Bored Ape Yacht Club (BAYC)?
Bored Ape Yacht Club (BAYC) is a collection of unique non-fungible tokens (NFTs) depicting a cartoon ape. It is a limited collection of 10,000 bored ape NFTs on the Ethereum blockchain. The BAYC NFT doubles as a Yacht Club membership card which according to their website grants exclusive members-only benefits. There are currently 6,457 BAYC owners and the most expensive BAYC ever sold was Bored Ape Yacht Club #8817 which was sold for US$3.4 million at the Sotheby’s Metaverse marketplace.
What is the ApeCoin $APE?
ApeCoin ($APE) is the ecosystem token for the BAYC project and BAYC owners are allocated 10,094 APE tokens per NFT. At its peak on 28th April 2022, each ApeCoin $APE was worth US$26.70. Currently, the price of $APE is down approximately 76% from this peak.