News for Logan Paul: the famous Internet personality and his NFT project CryptoZoo have been accused of being involved in a “rug pull” in a new class action lawsuit.
Announced in September 2021. CryptoZoo was marketed as an NFT-based game and advertised as “a self-contained ecosystem” that would allow virtual ZooKeepers to buy, sell, and trade exotic animals on the blockchain. Hatching them from eggs upon purchase.
NFT CryptoZoo: Here’s what’s going on.
A filing filed in the U.S. District Court for the Western District of Texas said the defendants “executed a ‘rug pull’. Promoting CryptoZoo’s products using Paul’s online following to consumers unfamiliar with digital currency products. Leading to tens of thousands of people purchasing these.
Moreover, a “rug pull” is a colloquial way to describe instances where a cryptocurrency developer raises funds, for example, for a new token or NFT line, by promising certain benefits to consumers. Except that the developers then abandon the project and fail to deliver the promised benefits, fraudulently withholding buyers’ funds.
According to the charges, the defendants allegedly marketed CryptoZoo’s NFTs to buyers.
Claiming that they would receive benefits, rewards, and exclusive access to other cryptocurrency resources at a later date.
As well as the support of an online ecosystem to use and market these NFTs.
The filing then claimed that unbeknownst to customers, the game did not work or never existed.
Defendants manipulated the digital currency market for zoo tokens to their advantage.
In addition, the filing alleged that immediately after completing the sale of all their NFTs, the defendants then transferred the money to wallets controlled by the defendants.
Who are Logan Paul and his NFT CryptoZoo project?
Paul, 27, currently has over 23 million subscribers on his YouTube channel, making him one of the platform’s biggest stars. A list of other defendants in the “Rug Pull” includes Paul’s assistant Danielle Strobel, Jeffrey Levin, his manager, Eduardo Ibanez, CryptoZoo’s main developer, Jake Greenbaum, one of CryptoZoo’s founders, Ophir Bentov and Ben Roth.
A lawsuit comes as Paul began to take some responsibility for recovering losses suffered by investors in CryptoZoo.
The online star took to Twitter last week to announce a $1.3 million rewards program for disappointed players, while also apologizing to well-known crypto YouTuber CoffeeZilla.
The latter had posted a series of videos criticizing Paul for his involvement in the CryptoZoo situation. Unfortunately, this is not the first time mainstream celebrities have come under scrutiny for their involvement in promoting NFT projects.
In August 2022, the U.S. consumer watchdog group Truth in Advertising (TINA) warned seventeen high-profile celebrities for allegedly promoting NFT without proper disclosures. Among them are Gwyneth Paltrow, Eva Longoria, Floyd Mayweather, Tom Brady, DJ Khaled, Snoop Dogg, and Paris Hilton.
Targeted NFT collections include the Bored Ape Yacht Club, World of Women and Autograph collections.
The group says the letters remind celebrities to clearly disclose any material connection to the NFT companies they are promoting.
citing long-standing Federal Trade Commission (FTC) rules.
Logan Paul and Coffeezilla: the dispute
Although YouTuber Coffeezilla has called the CryptoZoo game a “scam,” Logan Paul will not see him in court.
After becoming embroiled in an online feud with self-described “Internet detective” Coffeezilla, also known as Stephen Findeisen, Paul dropped legal threats he made some time ago via a controversial response video, now deleted.
In fact, Findeisen said he received the Logan call in which he confessed that he had deleted the two responses and was withdrawing his threats to sue. Prior to that, Paul had lashed out at Findeisen’s three-part video series criticizing Paul’s abandoned cryptographic game, CryptoZoo.
At a later date, the controversial YouTuber and WWE fighter claimed different things. In fact, in a Discord message, Paul said that his now-deleted response video, in which he accused Findeisen of creating “a defamatory piece” and threatened legal action, was, in fact, “reckless and misaligned with the real issue at hand.”
Saying, further, that the war was not with Findeisen and promising to take responsibility by presenting a plan soon. Paul, finally, had said in the video that “CryptoZoo is coming,” although it is unclear when, how, or even if that dream will come true.