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According to the legal firm, Yuga labs also launched the ApeCoin to defraud investors.
Law firm Scott+Scott is currently working on a class action against Yuga Labs for inappropriately inducing its community to buy its financial products. The proposed class action against Yuga Labs says it “inappropriately induced” community members to purchase Bored Ape Yacht Club NFTs and its affiliated ApeCoin token. Therefore, individual investors are coming together to seek restitution from losses receded from their purchases through a class action brought by Scott+Scott.
The law firm released a blog post explaining that Yuga Labs inflated the price of its NFTs and coin through celebrity promoters and endorsements. Scott+Scott added that the company promoted its growth prospects and possibilities for high returns to unsuspecting investors. According to the legal firm, Yuga labs also launched the ApeCoin to defraud investors further. The tokens could not maintain their gains as they depended on continuous celebrity promotion instead of actual utility or underlying technology. As such, retail investors began to suffer losses. They had to deal with tokes that had shed more than 87% of their values from the inflated high on the 28th of June.
Proposed Class Action Lawsuit against Yuga Labs
Individual investors are not joining hands to seek restitution for their losses. The case is not officially filed in a federal court. For now, Scott+Scott also called for more investors to come to seek compensation for their losses. It published a form for affected investors who want to join the class action against Yuga Labs.
“If you suffered losses in association with the purchase of YUGA LABS tokens or NFTs between April 2022 and June 2022 you are encouraged to reach out to Scott+Scott to learn more about your legal rights.”
Between April and June, ApeCoin grew to an ATH of $26.70. However, the token slumped, declining around 82.5% to $4.66 at the end of last month. Meanwhile, its floor price dropped from 151.5 Ether (ETH) to 92.9 ETH.
If the class action against Yuga Labs eventually makes it to court, Scott+Scott will need to prove that the company failed to make the necessary disclosures. A law professor at the University of Kentucky, Brain Fyre, said it is not likely that the SEC would jump on the Yuga Labs class action. He believes the Commission will try to avoid it as a plague. For his reason, Fyre said the SEC’s involvement will “open up a huge can of worms for them and force them to regulate all manner of other things that they don’t want to be regulating.”