Yuga Labs Faces Potential Class Action Lawsuit Over ‘Inflated’ BAYC NFTs

Bored Ape Yacht Club creator Yuga Labs used celebrity endorsements to inflate its NFTs, law firm Scott+Scott has claimed

article-image

ApeFest at NFT.NYC 2022 | Photo: Ornella Hernandez

share

key takeaways

  • Yuga Labs “inappropriately induced” investors to buy BAYC NFTs and ApeCoin, claims Scott+Scott
  • The law firm is yet to file an official complaint

Yuga Labs, the $4 billion startup behind the Bored Ape Yacht Club (BAYC) NFT collection, could face a class action lawsuit that alleges it artificially boosted the price of its crypto assets, leaving investors with deep losses.

Investors were “inappropriately induced” to buy the company’s NFTs (non-fungible tokens) and its native coin ApeCoin, law firm Scott+Scott wrote last Thursday.

Lawyers are claiming that Yuga Labs used celebrity promoters and endorsements to “inflate” the price of its NFTs by overpromising high returns.

Celebrities such as rapper Snoop Dogg, football star Tom Brady and influencer Paris Hilton, among others, own and have endorsed the BAYC collection. The most expensive BAYC digital artwork sold for $3.4 million late last year. 

More recently, prices for crypto assets and NFTs have declined amid the wider financial market downturn. The average price of a BAYC NFT sold over the past seven days is now $115,000, according to data from NFT Stats, down from around $425,000 three months ago.

Alongside its popular BAYC NFTs, Yuga Labs launched ApeCoin in March via the Ethereum blockchain, intended to power its upcoming metaverse ecosystem.

But Scott+Scott slammed the firm’s move to introduce a community-focused token. “After selling off millions of dollars of fraudulently promoted NFTs, Yuga Labs launched ApeCoin to further fleece investors,” lawyers said.

They added: “Once it was revealed that the touted growth was entirely dependent on continued promotion (as opposed to actual utility or underlying technology), retail investors were left with tokens that had lost over 87% from the inflated price high on April 28, 2022.”

ApeCoin, listed on major exchanges Coinbase, Binance and Kraken, opened trade at $8.15 on March 17. The token hit an all-time high of $26.70 on April 28 — a 200% surge. It has since retreated more than 75% to $6.30 as of Monday 4:40 am ET, CoinGecko data shows.

Yuga Labs class action would join hundreds of other crypto lawsuits

Scott+Scott is now calling on individual investors that have borne losses from their Yuga Labs-related investments between April to June this year to join a potential class action.

Pseudonymous critic Ryder Ripps — who is being sued by Yuga Labs in a separate case involving trademark infringement — said he expects more lawsuits to follow.

Others criticized the law firm for wanting to take up a case against Yuga Labs, with one suggesting the investors “don’t know how to hold.”

An official case is yet to be filed, but Scott+Scott would have to submit evidence that investors were not aware of risks involved, or that they didn’t know celebrities were (allegedly) being paid to promote the NFTs they held.

Scott+Scott maintains offices across the US, as well as New York, London, Amsterdam and Berlin. If formally proposed, the firm’s lawsuit would add to an ever-expanding sea of legal actions levied at cryptocurrency companies.

Bloomberg Law reported that the cryptocurrency industry had generated more than 200 class action lawsuits and other private litigations as of March, with targets including Binance, Solana Labs and KuCoin

Yuga Labs didn’t return Blockworks’ request for comment by press time.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Brooklyn, NY

SUN - MON, JUN. 22 - 23, 2025

Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]

recent research

Featured.png

Research

Helium stands at a pivotal moment in its evolution as a decentralized wireless network, balancing rapid growth, economic restructuring, and global expansion. With accelerated growth in domestic DAUs and Hotspots supporting its network, Helium is leveraging strategic partnerships and innovative proposals to scale internationally. The recent implementation of HIP 138, “Return to HNT,” has unified its token economy under HNT, simplifying participation and strengthening liquidity, while HIP 139’s phase-out of CBRS refocuses efforts on scalable Wi-Fi offload. Meanwhile, governance shifts under HIP 141 raise questions about centralization as Nova Labs consolidates control over the roadmap.

article-image

The DeFi Education Fund has ideas on how the crypto-friendly SEC can bring Commissioner Peirce’s vision to life

article-image

“Be prepared to do more with less,” Framework Ventures’ Michael Anderson said

article-image

Q1 may have been “frustrating,” but things are looking brighter for Q2

article-image

Tokens worth 20% of the current supply of the TRUMP memecoin launched by the president are set to be unlocked tomorrow

article-image

A crypto-industry lawsuit is “moot” now that Joint Resolution 25 has been signed into law

article-image

Fed Chair Powell assured markets that the labor market is in “good place,” dependent on price stability