You are on page 1of 95

Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 1 of 95 Page ID #:1

1 John T. Jasnoch (CA 281605)


jjasnoch@scott-scott.com
2 SCOTT+SCOTT ATTORNEYS AT LAW LLP
600 W. Broadway, Suite 3300
3 San Diego, CA 92101
Tel.: 619-233-4565
4 Fax: 619-236-0508
5 Counsel for Plaintiffs and the Proposed Class
6
7
UNITED STATES DISTRICT COURT
8
CENTRAL DISTRICT OF CALIFORNIA
9
WESTERN DIVISION
10
ADONIS REAL and ADAM TITCHER, Case No. 2:22-cv-08909
11 Individually and on Behalf of All Others
Similarly Situated, CLASS ACTION COMPLAINT
12
Plaintiffs,
13 v. DEMAND FOR JURY TRIAL
14
YUGA LABS, INC., WYLIE ARONOW,
15 GREG SOLANO, KEREM ATALAY,
ZESHAN ALI, NICOLE MUNIZ,
16 JASMIN SHOEMAKER, PATRICK
EHRLUND, CHRISTOPHER LYONS,
17 ALEXIS OHANIAN, AMY WU, MAARIA
BAJWA, DEAN STEINBECK, GUY
18 OSEARY, MIKE WINKELMANN,
MADONNA LOUISE CICCONE, PARIS
19 HILTON, JAMES FALLON, ELECTRIC
HOT DOG, INC., UNIVERSAL
20 TELEVISION, LLC, JUSTIN BIEBER,
GWYNETH PALTROW, SERENA
21 WILLIAMS, THOMAS PENTZ, AUSTIN
RICHARD POST, CALVIN BROADUS
22 JR., KEVIN HART, ALEXANDER
PALL, ANDREW TAGGART,
23 WARDELL STEPHEN CURRY II,
NAYVADIUS WILBURN CASH, ABEL
24 TESFAYE, KHALED MOHAMMED
KHALED, ADIDAS AMERICA INC.,
25 ADIDAS VENTURE B.V., IVAN SOTO-
WRIGHT, and MOONPAY USA LLC,
26
Defendants.
27
28
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 2 of 95 Page ID #:2

1 Plaintiffs Adonis Real and Adam Titcher, individually and on behalf of all
2 others similarly situated, bring this action against Yuga Labs, Inc. (“Yuga” or the
3 “Company”), Wylie Aronow, Greg Solano, Kerem Atalay, Zeshan Ali, Nicole
4 Muniz, Jasmin Shoemaker, Patrick Ehrlund, Christopher Lyons (the “Executive
5 Defendants”), Alexis Ohanian, Amy Wu, Maaria Bajwa, Dean Steinbeck (the “Ape
6 DAO Board Defendants”), Guy Oseary, Mike Winkelmann, Madonna Louise
7 Ciccone, Paris Hilton, James Fallon, Electric Hot Dog, Inc., Universal Television,
8 LLC, Justin Bieber, Gwyneth Paltrow, Serena Williams, Thomas Pentz, Austin
9 Richard Post, Calvin Broadus, Jr., Kevin Hart, Alexander Pall, Andrew Taggart,
10 Wardell Stephen Curry II, Nayvadius Wilburn Cash, Abel Tesfaye, Khaled
11 Mohammed Khaled, adidas America Inc., adidas Ventures B.V. (the “Promoter
12 Defendants”), Ivan Soto-Wright, and MoonPay USA LLC (“MoonPay,” and together
13 with Ivan Soto-Wright, the “MoonPay Defendants”) (collectively, with the
14 Company, the Executive Defendants, Ape DAO Board Defendants, and the Promoter
15 Defendants, the “Defendants”). The following allegations are based upon personal
16 knowledge as to Plaintiffs’ own facts, upon investigation by Plaintiffs’ counsel, and
17 upon information and belief where facts are solely in possession of Defendants.
18 I. NATURE OF THE CASE
19 “Celebrities and NFTs Are a Match Made in Hell…
Somehow, star endorsements have found a new low.”
20
-Amanda Mull, The Atlantic
21
1. Plaintiffs bring this action on behalf of all investors who purchased
22
Yuga’s non-fungible tokens (“NFTs”) or ApeCoin tokens (“ApeCoin”)1 between
23
April 23, 2021 and the present (the “Relevant Period”), and were damaged thereby.
24
25
26
27 1
Yuga’s various collections of NFTs (including, but not limited to, the Bored
28 Ape Yacht Club NFT collection), ApeCoins, and virtual land in the Otherside are
collectively referred to as the “Yuga Financial Products” or the “Yuga securities.”
1
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 3 of 95 Page ID #:3

1 2. Celebrity promotions of cryptocurrencies are fraught with problems. As


2 the U.S. Securities and Exchange Commission (“SEC”) previously stated:
3 “Celebrities and others are using social media networks to encourage the public to
4 purchase stocks and other investments. These endorsements may be unlawful if they
5 do not disclose the nature, source, and amount of any compensation paid, directly or
6 indirectly, by the company in exchange for the endorsement.”2 According to The
7 Atlantic: “Celebrity endorsements—of a product, a brand, an idea, a haircut—have
8 been around for ages, but they’ve become especially thick on the ground in recent
9 years, as stars have developed their own direct-advertising channels on social media.
10 For people with something to sell, a celebrity’s fan base provides an easy, responsive
11 audience.”3
12 3. This case epitomizes these concerns as it involves a vast scheme
13 between a blockchain start-up company, Yuga Labs, Inc. (“Yuga”), a highly-
14 connected Hollywood talent agent (Defendant Guy Oseary), and a front operation
15 (MoonPay), who all united for the purpose of promoting and selling a suite of digital
16 assets. The executives at Yuga and Oseary together devised a plan to leverage their
17 vast network of A-list musicians, athletes, and celebrity clients and associates to
18 misleadingly promote and sell the Yuga Financial Products.
19 4. Yuga’s flagship NFT collection, the so-called Bored Ape Yacht Club
20 (“BAYC”), and related brand rely heavily on the perception that “joining the club”
21 (i.e., buying a BAYC NFT) brings investors status and provides them access to
22 events, benefits, and other lucrative investment opportunities exclusive to BAYC
23 holders. The exclusiveness of BAYC membership was entirely based on the
24
25 2
Statement, SEC Statement Urging Caution Around Celebrity Backed ICOS,
26 U.S. SEC. & EXCH. COMM’N (Nov. 1, 2017), https://www.sec.gov/news/public-stat
ement/statement-potentially-unlawful-promotion-icos.
27 3 Amanda Mull, Celebrities and NFTs Are a Match Made in Hell, THE ATLANTIC
28 (Feb. 4, 2022), available at https://www.theatlantic.com/technology/archi
ve/2022/02/nft-jimmy-fallon-paris-hilton-millionaire/621486/.
2
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 4 of 95 Page ID #:4

1 inclusion and endorsements of highly influential celebrities. But this purported


2 interest in, and endorsement of, the BAYC NFTs by high-profile taste makers was
3 entirely manufactured by Oseary at the behest of the Executive Defendants.
4 5. In order to make the promotion of, and subsequent interest in, the BAYC
5 NFTs appear to be organic (as opposed to being solely the result of a paid promotion),
6 the Company needed a way to discreetly pay their celebrity cohorts. To do this,
7 Oseary tapped into a different part of his network: the MoonPay Defendants.
8 Oseary’s venture capital firm, Sound Ventures, was one of the early investors in
9 MoonPay, along with, inter alia, Defendants Justin Bieber, Paris Hilton, Jimmy
10 Fallon, Gwyneth Paltrow, Serena Williams, Austin Post, Thomas Pentz, Calvin
11 Broadus, Jr., Kevin Hart, Alexander Pall, Andrew Taggart, Wardell Stephen Curry
12 II, Nayvadius Cash, and Abel Tesfaye. MoonPay purports to be a white-glove service
13 designed to help the super-rich and celebrities buy NFTs “‘without all the hassle of
14 setting up a wallet, buying crypto, using that crypto to purchase an NFT and then
15 taking custody of it.’”4 In truth, the Executive Defendants and Oseary used their
16 connections to MoonPay and its service as a covert way to compensate the Promoter
17 Defendants for their promotions of the BAYC NFTs without disclosing it to
18 unsuspecting investors.
19 6. Defendants’ promotional campaign was wildly successful, generating
20 billions of dollars in sales and re-sales. The manufactured celebrity endorsements
21 and misleading promotions regarding the launch of an entire BAYC ecosystem (the
22 so-called Otherside metaverse) were able to artificially increase the interest in and
23 price of the BAYC NFTs during the Relevant Period, causing investors to purchase
24 these losing investments at drastically inflated prices.
25
26
27 4
Ryan Weeks, MoonPay has quietly set up a concierge service to help
28 celebrities buy NFTS, THE BLOCK (Nov. 5, 2021), https://www.theblock.co/post/12
5483/moonpay-concierge-celebrities-nft?utm_source=rss&utm_medium=rss.
3
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 5 of 95 Page ID #:5

1 7. The staggering profits of the BAYC NFTs were not enough for the
2 Executive Defendants. Next, they cut out the artifice of the NFT altogether and went
3 a more direct route to making money: they created their own out of thin air. The
4 Executive Defendants minted digital assets called ApeCoins and promoted that
5 BAYC NFT owners would receive an airdrop of ApeCoins for membership in the
6 club. In doing so, the Executive Defendants, Oseary, and the Ape DAO Board
7 Defendants sought to obscure their sales of their own massive ApeCoin allocations
8 directly to retail purchasers. At no point did any of the Defendants register these
9 securities with the SEC.
10 8. In addition, Executive Defendants Aronow, Solano, Atalay, and Ali
11 disguised their control of Yuga to avoid scrutiny and facilitate this scheme. This
12 conspiracy among the Executive Defendants and Oseary, then carried out with
13 assistance of the Promoter Defendants and the MoonPay Defendants, raked in
14 millions for them all. Meanwhile, investors were left with staggering losses.
15 9. Plaintiffs bring this class action on behalf of themselves and an
16 objectively identifiable Class consisting of all investors that purchased the Yuga
17 Financial Products between April 23, 2021 and the present.
18 II. PARTIES
19 A. Plaintiffs
20 10. Plaintiff Adam Titcher (“Titcher”) is a resident and citizen of California.
21 During the Relevant Period, Titcher purchased a Mutant Ape Yacht Club (“MAYC”)
22 NFT via the U.S.-based NFT exchange OpenSea. Titcher also purchased an
23 Otherdeed NFT associated with the Yuga metaverse, Otherside, via the U.S.-based
24 NFT exchange on OpenSea. Titcher purchased the Yuga securities in reliance on the
25 misleading promotions from the Company and the Promoter Defendants (described
26 in detail below), and he suffered investment losses as a result of Defendants’ conduct.
27 11. Plaintiff Adonis Real (“Real”) is a resident and citizen of Florida.
28 During the Relevant Period, Real purchased ApeCoin tokens via the U.S.-based
4
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 6 of 95 Page ID #:6

1 cryptocurrency exchange Coinbase. Real purchased ApeCoin tokens in reliance on


2 the misleading promotions from the Company and the Promoter Defendants
3 (described in detail below) and suffered investment losses as a result of Defendants’
4 conduct.
5 B. Defendants
6 12. Defendant Yuga Labs, Inc. (“Yuga”) is a Delaware corporation,
7 registered on February, 8, 2021, with its headquarters located at 1850 Towers
8 Crescent Plaza, Suite 200, Tysons, VA 22182. On September 16, 2022, Yuga
9 registered with the California Secretary of State to transact business within
10 California.
11 13. Wylie Aronow (“Aronow”) is a resident and citizen of South Carolina,
12 living in Mount Pleasant, South Carolina. Aronow is the co-founder/creator of the
13 Company, served as a consultant and spokesman for the Company, exercised control
14 over the Company and directed and/or authorized, directly or indirectly, the sale
15 and/or solicitations of Yuga Financial Products to the public.
16 14. Defendant Greg Solano (“Solano”) is a resident and citizen of Florida,
17 living in Fort Lauderdale, Florida. Solano is the co-founder/creator of the Company,
18 served as a consultant and spokesman for the Company, exercised control over the
19 Company and directed and/or authorized, directly or indirectly, the sale and/or
20 solicitations of Yuga Financial Products to the public.
21 15. Kerem Atalay (“Atalay”) is a resident and citizen of Missouri, living in
22 St. Louis, Missouri. Atalay is the co-founder/creator of the Company, served as a
23 developer, consultant and spokesman for the Company, exercised control over the
24 Company and directed and/or authorized, directly or indirectly, the sale and/or
25 solicitations of Yuga Financial Products to the public.
26 16. Zeshan Ali (“Ali”) is a resident and citizen of California, living in Los
27 Angeles, California. Ali is the co-founder/creator of the Company, served as a
28 developer, consultant and spokesman for the Company, exercised control over the
5
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 7 of 95 Page ID #:7

1 Company and directed and/or authorized, directly or indirectly, the sale and/or
2 solicitations of Yuga Financial Products to the public.
3 17. Defendant Nicole Muniz (“Muniz”) is a resident and citizen of New
4 York, living in Brooklyn, New York. Muniz is the Chief Executive Officer (“CEO”)
5 of the Company, served as a consultant and spokesman for the Company, exercised
6 control over the Company and directed and/or authorized, directly or indirectly, the
7 sale and/or solicitations of Yuga Financial Products to the public.
8 18. Defendant Jasmin Shoemaker (“Shoemaker”) is a resident and citizen
9 of New York, living in Brooklyn, New York. Shoemaker is the Chief Operating
10 Officer (“COO”) of the Company, served as a consultant and spokesman for the
11 Company, exercised control over the Company and directed and/or authorized,
12 directly or indirectly, the sale and/or solicitations of Yuga Financial Products to the
13 public.
14 19. Defendant Patrick Ehrlund (“Ehrlund”) is a resident and citizen of New
15 York, living in Brooklyn, New York. Ehrlund is the Chief Creative Officer (“CCO”)
16 and minority partner of the Company, served as a consultant and spokesman for the
17 Company, exercised control over the Company and directed and/or authorized,
18 directly or indirectly, the sale and/or solicitations of Yuga Financial Products to the
19 public.
20 20. Defendant Christopher Lyons (“Lyons”) is a resident and citizen of
21 Florida, living in Plantation, Florida. Lyons served as a board member, consultant
22 and spokesman for the Company, exercised control over the Company and directed
23 and/or authorized, directly or indirectly, the sale and/or solicitations of Yuga
24 Financial Products to the public.
25 21. Defendant Alexis Ohanian (“Ohanian”) is a resident and citizen of
26 Florida, living in Jupiter, Florida. Ohanian served as a board member of the Ape
27 DAO, served as a consultant and spokesman for the Company, exercised control over
28 the Ape DAO, Ape Foundation, and the Company and directed and/or authorized,
6
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 8 of 95 Page ID #:8

1 directly or indirectly, the sale and/or solicitations of Yuga Financial Products to the
2 public. Ohanian’s SevenSevenSix was one of several investors in Yuga during the
3 $450 million funding round.
4 22. Defendant Amy Wu (“Wu”) is a resident and citizen of California, living
5 in San Francisco, California. Wu served as a board member of the Ape DAO, served
6 as a consultant and spokesman for the Company, exercised control over the Ape
7 DAO, Ape Foundation, and the Company and directed and/or authorized, directly or
8 indirectly, the sale and/or solicitations of Yuga Financial Products to the public.
9 23. Defendant Maaria Bajwa (“Bajwa”) is a resident and citizen of
10 California, living in Glendale, California. Bajwa served as a board member of the
11 Ape DAO, served as a consultant and spokesman for the Company, exercised control
12 over the Ape DAO, Ape Foundation, and the Company and directed and/or
13 authorized, directly or indirectly, the sale and/or solicitations of Yuga Financial
14 Products to the public.
15 24. Defendant Dean Steinbeck (“Steinbeck”) is a resident and citizen of
16 California, living in Beverly Hills, California. Steinbeck served as a board member
17 of the Ape DAO, served as a consultant and spokesman for the Company, exercised
18 control over the Ape DAO, Ape Foundation, and the Company and directed and/or
19 authorized, directly or indirectly, the sale and/or solicitations of Yuga Financial
20 Products to the public.
21 25. Defendant Guy Oseary (“Oseary”) is a resident and citizen of California,
22 living in Santa Monica, California. Oseary acted as a minority partner, consultant
23 and spokesman for the Company, exercised control over the Company and directed
24 and/or authorized, directly or indirectly, the sale and/or solicitations of Yuga
25 Financial Products to the public. Oseary’s Sound Ventures was one of several
26 investors in Yuga during the Seed funding rounds.
27 26. Defendant Mike “Beeple” Winkelmann (“Winkelmann”) is a resident
28 and citizen of South Carolina, living in North Charleston, South Carolina.
7
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 9 of 95 Page ID #:9

1 Winkelmann acted as a promotor for the Company and solicited sales of Yuga
2 securities to the public.
3 27. Defendant Madonna Louise Ciccone (“Ciccone”) is a resident and
4 citizen of California, living in Hidden Hills, California. Ciccone acted as a promotor
5 for the Company and solicited sales of Yuga securities to the public.
6 28. Defendant Justin Bieber (“Bieber”) is a resident and citizen of
7 California, living in Hidden Hills, California. Bieber acted as a promotor for the
8 Company and solicited sales of Yuga securities to the public.
9 29. Defendant James “Jimmy” Fallon (“Fallon”) is a resident and citizen of
10 New York, living in New York, New York. Fallon acted as a promotor for the
11 Company, and solicited sales of Yuga securities to the public.
12 30. Defendant Electric Hot Dog, Inc. (“EHD” f/k/a Holiday Road) is a New
13 York corporation, with its headquarters located at 200 Park Avenue South, 8th Floor,
14 New York, NY 10003. EHD is Defendant Fallon’s personal production company, as
15 well as being the production company for The Tonight Show (“Tonight Show”), of
16 which Defendant Fallon is the host. EHD acted as a spokesman for the Company,
17 exercised control over Defendant Fallon and the content and disclosures of the
18 Tonight Show, and directed and/or authorized, directly or indirectly, the sale and/or
19 solicitations of Yuga securities to the public.
20 31. Defendant Universal Television, LLC (“Universal”) is a New York
21 corporation, with its headquarters located at 100 Universal City Plaza, Universal City,
22 CA 91608. Universal is the production company for the Tonight Show, of which
23 Defendant Fallon is the host. Universal acted as an indirect spokesman for the
24 Company by virtue of its exercise of control over both Defendant Fallon and the
25 content and disclosures of the Tonight Show, and directed and/or authorized, directly
26 or indirectly, the sale and/or solicitations of Yuga securities to the public.
27
28
8
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 10 of 95 Page ID #:10

1 32. Defendant Paris Hilton (“Hilton”) is a resident and citizen of California,


2 living in Malibu, California. Hilton acted as a promotor for the Company and
3 solicited sales of Yuga securities to the public.
4 33. Defendant Gwyneth Paltrow (“Paltrow”) is a resident and citizen of
5 California, living in Montecito, California. Paltrow acted as a promotor for the
6 Company, and solicited sales of Yuga securities to the public.
7 34. Defendant Serena Williams (“Williams”) is a resident and citizen of
8 Florida, living in Jupiter, Florida. Williams acted as a promotor for the Company,
9 and solicited sales of Yuga securities to the public.
10 35. Defendant Austin Richard “Post Malone” Post (“Post”) is a resident and
11 citizen of Utah, living in Cottonwood Heights, Utah. Post acted as a promotor for
12 the Company, and solicited sales of Yuga securities to the public.
13 36. Defendant Thomas “Diplo” Pentz (“Pentz”) is a resident and citizen of
14 California, living in Montecito, California. Pentz acted as a promotor for the
15 Company, and solicited sales of Yuga securities to the public.
16 37. Defendant Calvin “Snoop Dogg” Broadus, Jr. (“Broadus”) is a resident
17 and citizen of California, living in Diamond Bar, California. Broadus acted as a
18 promotor for the Company, and solicited sales of Yuga securities to the public.
19 38. Defendant Kevin Hart (“Hart”) is a resident and citizen of California,
20 living in Calabasas, California. Hart acted as a promotor for the Company, and
21 solicited sales of Yuga securities to the public.
22 39. Defendant Alexander Pall (“Pall”) is a resident and citizen of California,
23 living in Hollywood, California. Pall acted as a promotor for the Company, and
24 solicited sales of Yuga securities to the public.
25 40. Defendant Andrew Taggart (“Taggart”) is a resident and citizen of
26 California, living in Los Angeles, California. Taggart acted as a promotor for the
27 Company, and solicited sales of Yuga securities to the public.
28
9
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 11 of 95 Page ID #:11

1 41. Defendant Wardell Stephen Curry II (“Curry”) is a resident and citizen


2 of California, living in Atherton, California. Curry acted as a promotor for the
3 Company, and solicited sales of Yuga securities to the public.
4 42. Defendant Nayvadius “Future” Wilburn Cash (“Wilburn Cash”) is a
5 resident and citizen of Georgia, living in Decatur, Georgia. Wilburn Cash as a
6 promotor for the Company, and solicited sales of Yuga securities to the public.
7 43. Defendant Abel “The Weeknd” Tesfaye (“Tesfaye”) is a resident and
8 citizen of California, living in Los Angeles, California. Tesfaye acted as a promotor
9 for the Company, and solicited sales of Yuga securities to the public.
10 44. Defendant Khaled Mohammed Khaled (“Khaled”) is a resident and
11 citizen of California, living in Los Angeles, California. Khaled acted as a promotor
12 for the Company, and solicited sales of Yuga securities to the public.
13 45. Defendant adidas America Inc. is an Oregon corporation, with its
14 headquarters located at 5055 N Greeley Avenue, Portland, Oregon 97217. Adidas
15 America Inc. is the parent of adidas Ventures B.V., and acted as an agent and direct
16 or indirect spokesman for the Company by virtue of its capital investment in the
17 Company, and directed and/or authorized, directly or indirectly, the solicitations of
18 Yuga securities to the public. On March 29, 2010, adidas America Inc. registered
19 with the California Secretary of State to transact business within California.
20 46. Defendant adidas Ventures B.V. is a corporate venture capital firm with
21 its headquarters located at Hoogoorddreef 9 A, 1101BA, Amsterdam, Netherlands.
22 adidas Ventures B.V. operates as the investment arm of adidas America Inc. and acted
23 as an agent and direct or indirect spokesman for the Company by virtue of its capital
24 investment in the Company, and directed and/or authorized, directly or indirectly, the
25 solicitations of Yuga securities to the public.
26 47. Defendants adidas America Inc and adidas Ventures B.V. are
27 collectively referred to as “Adidas.”
28
10
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 12 of 95 Page ID #:12

1 48. Defendant Ivan Soto-Wright (“Soto-Wright”) is a resident and citizen of


2 Florida, living in Miami, Florida. Soto-Wright served as the CEO of MoonPay during
3 the Relevant Period, and acted as a promotor for the Company, and solicited sales of
4 Yuga securities to the public.
5 49. Defendant MoonPay USA LLC (“MoonPay”) is a Delaware
6 corporation, with its headquarters located at 1111 Brickell Avenue, 10th Floor,
7 Miami, Florida 33131. MoonPay acted as an agent and indirect spokesman for the
8 Company by virtue of it being controlled, in part, by Defendant Oseary, directed
9 and/or authorized, directly or indirectly, the solicitations of Yuga securities to the
10 public. On April 30, 2021, MoonPay registered with the California Secretary of State
11 to transact business within California.
12 III. JURISDICTION AND VENUE
13 50. This Court has subject-matter jurisdiction over this action pursuant to 28
14 U.S.C. §1332. Plaintiffs bring this civil action seeking to represent a class of more
15 than 100 plaintiffs pursuant to Federal Rule of Civil Procedure 23. Plaintiffs are
16 citizens of the State of California and the State of Florida. 17 of the 37 named
17 Defendants are citizens of California; all of the other Defendants reside outside of
18 California. Plaintiffs seek an award exceeding $5,000,000, exclusive of interest and
19 costs, on behalf of themselves and the putative Class.
20 51. The Court has general jurisdiction over Defendants Ali, Wu, Bajwa,
21 Steinbeck, Oseary, Ciccone, Bieber, Hilton, Paltrow, Pentz, Broadus, Hart, Pall,
22 Taggart, Curry, Tesfaye, and Khaled as they are all residents of the State of California
23 and are thus “at home” in the forum.
24 52. This Court may exercise jurisdiction over Defendants because they have
25 continuous and systematic contacts with this District, do substantial business in this
26 State and within this District, and engage in unlawful practices in this District as
27 described in this Complaint, so as to subject themselves to personal jurisdiction in
28
11
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 13 of 95 Page ID #:13

1 this District, thus rendering the exercise of jurisdiction by this Court proper and
2 necessary.
3 53. Venue is proper in this judicial District pursuant to 28 U.S.C. §1391(b)
4 because Defendants live and/or conduct business in this District, and a substantial
5 part of the events or omissions giving rise to the claims alleged herein occurred in
6 this District.
7 IV. FACTUAL ALLEGATIONS
8 54. Cryptocurrency, or crypto, is a form of digital asset that exists virtually
9 and uses cryptography to secure transactions. Cryptocurrencies use a decentralized
10 system to record transactions and issue new units. The first cryptocurrency was
11 Bitcoin, which was founded in 2009. As of March 2022, there are 18,465
12 cryptocurrencies in existence.5
13 55. Anyone can create a new cryptocurrency. An internet search will
14 provide you step-by-step instructions with video for creating a new cryptocurrency
15 in less than an hour. Once created, the new cryptocurrency can be traded on
16 cryptocurrency exchanges. Exchanges can be centralized such as Coinbase,
17 Crypto.com, Gemini, BitMart and others, or decentralized (Dex) such as Uniswap,
18 Pancake Swap, and others.
19 56. Cryptocurrency is stored in crypto “wallets”, which are physical devices
20 or online software used to store the private keys to the owner’s cryptocurrencies
21 securely. Wallets have unique identifiers called “Wallet IDs.” There is no limit on
22 the number of wallets a person can control.
23 57. Transactions of cryptocurrencies are recorded in a “blockchain,” which
24 serves as a distributed public ledger. The amount of cryptocurrency transacted, the
25 sender’s wallet address, the recipient’s wallet address and the date and time of the
26
27 5
Josh Howarth, How Many Cryptocurrencies are There In 2022?, EXPLODING
28 TOPICS (July 19, 2022), https://explodingtopics.com/blog/number-of-cryptocurrenc
ies.
12
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 14 of 95 Page ID #:14

1 transfer for every transfer of cryptocurrency between digital wallets can be publicly
2 viewed on the blockchain by using any number of websites like
3 www.blockchain.com/explorer or www.etherscan.io.
4 58. The identity of an owner of a particular wallet is not publicly available
5 from the blockchain. However, an owner can choose to reveal themselves. Or, since
6 users usually have to reveal their identity in order to receive services or goods, many
7 times the owner of a wallet can be deduced from a wallet’s transactions or by
8 matching wallet data with other identifiable data points such as a user’s IP address.
9 59. Like physical money, cryptocurrencies are fungible, meaning that they
10 can be traded or exchanged, one for another. For example, one bitcoin is always
11 equal in value to another bitcoin. Conversely, non-fungible tokens (“NFTs”) are
12 cryptographic assets with unique identification codes and metadata that distinguish
13 them from each other and cannot be replicated. Unlike regular cryptocurrencies,
14 NFTs cannot be traded or exchanged at equivalency. Instead, each NFT is assigned
15 its own value. Notably, a given NFT collection may set a floor price for each of its
16 NFTs. This is the lowest “Buy Now” price for an NFT within that collection. For
17 example, if the floor price for an NFT collection is five ether, it means that the lowest
18 price someone can pay for an NFT that is not currently in an auction is five of the
19 cryptocurrency token ether. Floor price is one of the key metrics investors consider
20 when evaluating the intrinsic value for an NFT.
21 60. Besides being traded and exchanged, a cryptocurrency may sometimes
22 also be used for governance over the particular project or for some artificially created
23 purpose or use. For example, cryptocurrencies can be used as a form of in-game
24 virtual currency in an online video game. Cryptocurrencies can also be used as an
25 incentive for players who earn special tokens as part of the game that can be swapped
26 for other tokens or sold for cash.
27 61. Similarly, a cryptocurrency can be used as virtual currency for purchases
28 made within the metaverse. The “metaverse” refers to a virtual-reality space in which
13
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 15 of 95 Page ID #:15

1 users can interact with a computer-generated virtual environment and other users.
2 Analysts predict that the metaverse has the potential to generate up to $5 trillion in
3 value by 2030.6
4 A. Yuga Labs Background
5 1. The Founders
6 62. Yuga Labs is a cryptocurrency-related NFT project founded in February
7 2021 by a group of four friends: Defendants Aronow, Solano, Atalay, and Ali, along
8 with Defendant Muniz.
9 63. Ali first met Atalay when they were at the University of Virginia, and
10 then both met Solano while studying computer science at the University of Maryland.
11 Solano was also friends with Aronow, sharing a mutual interest in literature and
12 online gaming.
13 64. In February 2021, Solano contacted Aronow about starting an NFT
14 project. During the early conception of the Bored Ape Yacht Club brand, Aronow
15 brought in Muniz to discuss both the creative and business side of the project.
16 According to an interview of both Solano and Aronow, they described the early
17 formation of Yuga as follows:
18 Despite his interest in digital collectibles, Solano did not buy his
first NFT until early 2021. Shortly thereafter, in February, Solano
19
texted Aronow to start an NFT project of their own. Aronow said: “We
20 immediately started to conceive. One of the ideas was a public digital
canvas, which Aronow shared with his longtime friend Nicole Muniz,
21
who is now the CEO of Yuga. She keenly predicted that someone would
22 paint on it. a little brother.”
23
These people did just that. Aronow said: “I was like, where
24 would you draw a phallus? The answer was: on the bathroom wall of a
25 dive bar. So what kind of people would go there?” The kind of people
he knew on Crypto Twitter who made their fortunes in cryptocurrencies
26
27 6
See, e.g., Value Creation in the Metaverse, MCKINSEY & COMPANY,
28 https://www.mckinsey.com/capabilities/growth-marketing-and-sales/our-insights
/value-creation-in-the-metaverse (last visited Oct. 27, 2022).
14
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 16 of 95 Page ID #:16

1 but still only wanted to play MMORPGs online and not live the luxury
life of the expected multi-millionaire.
2
3 Aronow sent Solano a “whole article” to plan the idea, where the
name “Bored Ape Yacht Club” came up. “As the great editor, Solano
4
said—‘That’s it. That’s it'” recalls Aronow. The concept evolved–in
5 cryptocurrencies, [M]illionaires are real apes, and the term “ape” means
that someone living in 2031 will compulsively invest in a new project
6
without doing much research. Aronow said he and Solano started a
7 limited liability company the next day.7
8 65. Atalay and Ali served as the developers of the BAYC NFT collection,
9 working on the technical side of the ERC-721 token’s creation while Solano and
10 Aronow served as Yuga’s creative department.
11 66. Initially, Solano, Aronow, Atalay, and Ali hid their respective identities
12 from the public, instead operating under the following pseudonyms/alter egos to
13 avoid scrutiny from the public and investors during the early launch of the Company:
14 a. Wylie Aronow went by “Gordon Goner”;
15 b. Greg Solano went by “Gargamel”;
16 c. Kerem Atalay went by “EmperorTomatoKetchup”; and
17 d. Zeshan Ali went by “Sass.”
18 67. Yuga develops and sells to investors a variety of digital assets, which
19 fall into two basic categories: (1) artwork from various NFT collections; and (2) a
20 native token.
21 68. Initially, the lion’s share of Yuga’s business comes from the sale of its
22 various NFT collections. And Yuga also gets a 2.5% royalty every time one of its
23 NFTs is resold on the secondary market. Yuga reportedly earned $127 million in
24
25
26
27 7
Interview with the founder of BAYC Boring [sic] Ape: the biggest success story
28 in the NFT world, COINYUPPIE (Aug. 8, 2022), https://coinyuppie.com/interview-
with-the-founder-of-bayc-boring-ape-the-biggest-success-story-in-the-nft-world/.
15
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 17 of 95 Page ID #:17

1 profits from its NFT business in 2021.8 According to a Yuga pitch deck that was
2 leaked online, the “BAYC collections alone account for approximately 10% of the
3 volume on OpenSea,” the largest NFT marketplace in the world.9
4 69. On April 20, 2021, the Company created the Bored Ape Yacht Club
5 collection of NFTs, minting 10,000 BAYC NFTs. As the name suggests, the BAYC
6 NFTs feature pictures of an animated ape with a bored facial expression. These
7 avatars can be customized with unique traits and characteristics. In fact, these BAYC
8 NFTs are distinguished and valued by the accessories that are selected to adorn the
9 digital ape. For example, a BAYC NFT wearing sunglasses is generally considered
10 to be more rare (and thus more valuable) than one that does not have a similar fashion
11 accessory.
12 70. On April 24, 2021, Yuga launched the BAYC NFT collection, selling
13 all 10,000 BAYC NFTs over the course of a week until the official public launch date
14 of April 30, 2021.
15 71. Yuga’s portfolio of NFT collections is collectively worth billions. The
16 BAYC collection alone was valued in the billions of dollars, with the floor price at
17 around $114,000 as of August 2022, according to CoinGecko. Yuga also created a
18 spinoff brand NFT collection, the Mutant Ape Yacht Club collection, worth
19 approximately $427 million.10 In addition, Yuga’s NFT collection portfolio contains
20 acquisitions by the Company, including owning the rights to the CryptoPunks (a
21
8
22 Ryan Weeks, Bored Ape startup plans virtual land sales, APECoin token to
kickstart metaverse gaming project, THE BLOCK (Mar. 25, 2022),
23 https://www.theblock.co/post/137829/bored-ape-yacht-club-yuga-labs-virtual-land-
24 sales-metaverse.
9
Yuga Labs Pitch Deck: BAYC founders raised $450M from Andreesen
25 Horowitz, at *28, YUGA LABS, INC. (Mar. 19, 2022), https://www.slideshare.net
26 /PitchDecks/yuga-labs-pitch-deck-bayc-founders-project-455m-nft-revenue-2022
(“Yuga Labs Pitch Deck”).
27 10
Mutant Ape Yacht Club (MAYC) NFTs are created by combining two digital
28 assets created by Yuga: a BAYC NFT and a SERUM NFT. The idea being that the
“serum” would turn the buyer’s “bored ape” into a “mutant ape.”
16
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 18 of 95 Page ID #:18

1 series of avatars in an eight-bit art style worth approximately $970 million in total)
2 and Meebits collections. These acquisitions were funded thanks, in part, to the seed
3 investments from a16z and Ape DAO Board member Christopher Lyons.
4 72. In September 2021, Defendant Muniz began serving as Yuga’s CEO.
5 73. On February 4, 2022 an article on BuzzFeed.com (“BuzzFeed”) revealed
6 the identity of Defendants Solano and Aronow. Shortly thereafter, Aronow posted a
7 picture of himself on his Gordon Goner Twitter account, offering that he was
8 revealing his face because he was “doxxed11 against my will.”12 Similarly, Solano
9 posted his own picture on his Crypto Gargamel (Garga.eth) Twitter account, stating
10 “[g]ot doxed [sic] so why not.”13
11 74. After Defendants Solano, Aronow, Atalay, Ali, and Muniz were able to
12 massively increase interest in the BAYC NFTs and the idea of cross-utilization of
13 those NFTs through the misleading promotional campaign executed by the Promotor
14 Defendants, the Executive Defendants and Oseary turned towards expanding the
15 Bored Ape brand beyond NFTs. First, Muniz suggested new financial spin-off
16 products like the MAYC and Bored Ape Kennel Club NFT collections. Next, came
17 Yuga’s version of printing its own money: ApeCoin tokens (discussed further below).
18 75. Finally, in an effort to artificially generate some actual use for these
19 various unregistered Yuga securities (beyond making corporate insiders filthy rich),
20 the Executive Defendants claimed to be creating its own collective virtual shared
21 space or “metaverse” platform, Otherside. The Otherside metaverse was billed to be
22 Yuga’s persistent, immersive virtual world that users could interact with using digital
23
11
24 “Dox” means to publicly identify or publish private information about
someone without their consent.
25 12
GordonGoner.eth (Wylie Aronow) (@GordonGoner), TWITTER (Feb. 4, 2022,
26 4:55 PM), https://twitter.com/GordonGoner/status/1489764541084930048?s=20&t
=g1mRpxWbWmWNzjxw385m2A.
27 13
Garga.eth (Greg Solano) (@CryptoGarga), TWITTER (Feb. 4, 2022, 5:10 PM),
28 https://twitter.com/CryptoGarga/status/1489768443771596800?s=20&t=g1mRpxW
bWmWNzjxw385m2A.
17
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 19 of 95 Page ID #:19

1 avatars from the BAYC, MAYC, or other Yuga NFT collections. Executive
2 Defendants, Oseary, and the Ape DAO Board Defendants touted ApeCoin tokens as
3 the Otherside’s native currency. Yuga and its executives promoted the Otherdeed
4 NFTs (and related plots of “land” in the Otherside metaverse) as an extension of the
5 BAYC ecosystem and the place where the BAYC NFTs could grow, prosper, and
6 interact with others “in the club.”
7 2. The Fifth Ape - Oseary
8 76. On October 12, 2021, the Company announced in a Variety Magazine
9 exclusive article that it had signed a representation deal with Defendant Oseary to
10 expand the BAYC NFTs into movies, TV, music, and gaming.14 In truth, Oseary was
11 officially brought in to actively recruit the Promoter Defendants to solicit sales of the
12 BAYC NFTs and other Yuga Financial Products, which they did.
13 77. While each of the individual Executive Defendants played their part in
14 the organizing of the misleading promotion scheme (discussed further below), none
15 was more instrumental than the so-called “Fifth Ape” Defendant Oseary, who spent
16 years in Hollywood building relationships with the Promoter Defendants. For
17 example, when Defendant Fallon assumed the Tonight Show hosting role on February
18 17, 2014, one of his first two guests was the world-famous rock band U2. As the
19 band’s manager at the time, Oseary facilitated this appearance and helped Fallon’s
20 career take off. Fallon also regularly attends an annual MTV Video Music Awards
21 after-party hosted by Oseary. Concurrently, Oseary also conducts business with
22 Defendant Bieber’s manager Scooter Braun via their start-up investment funds A-
23 Grade Investments and SB Projects, respectively. More directly, Oseary has been
24 Defendant Ciccone’s personal manager and business partner for decades. And
25
26 14
Shirley Halperin, Bored Ape Yacht Club Creators Yuga Labs Sign
27 Representation Deal With Madonna, U2 Manager Guy Oseary (Exclusive), VARIETY
28 (Oct. 12, 2021), https://variety.com/2021/digital/news/bored-ape-yacht-club-yuga-
labs-sign-with-madonna-u2-manager-guy-oseary-1235086011/.
18
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 20 of 95 Page ID #:20

1 Oseary’s social media company Pearpop received its initial financial backing from
2 Defendant Hilton (along with Ape DAO Board Defendant Ohanian individually).
3 Finally, Oseary’s network extends to other talent management agencies like the
4 Creative Arts Agency (“CAA”), which also represents Defendants Ciccone, Fallon,
5 and Paltrow. Oseary’s Sound Ventures partner, Ashton Kutcher, is also represented
6 by CAA.
7 78. Oseary is further linked to several of the Promoter Defendants via their
8 mutual early investments in a cryptocurrency company, MoonPay. Significantly,
9 many of MoonPay’s early investors were made up of Oseary’s immediate and
10 extended network. For example, Oseary and Sound Ventures were also early
11 investors in MoonPay. Other early MoonPay backers include Defendants Paris
12 Hilton, Justin Bieber (and his manager Scooter Braun), Gwyneth Paltrow, Austin
13 Post, Thomas Pentz, Calvin Broadus, Jr., Kevin Hart, Alexander Pall, Andrew
14 Taggart, Nayvadius Wilburn Cash, and Abel Tesfaye. CAA is also an initial backer
15 of MoonPay.
16 79. Oseary saw an opportunity to profit from using his celebrity contacts to
17 promote the sale of Yuga securities, and he took it. Oseary used NFT artist and
18 business partner Defendant Mike “Beeple” Winkelmann to facilitate a meeting with
19 Yuga and the Executive Defendants, so that Oseary could pitch his plan to promote
20 Yuga and the BAYC NFT collection. Defendant Aronow admitted that “‘[w]e didn’t
21 really know why he [i.e. Oseary] was so interested in us – it was a little perplexing.’”
22 According to Aronow, Oseary eventually managed to “‘become integral to the
23 process of basically everything that we do.’”15
24 80. Oseary had an overlapping financial interest in promoting MoonPay’s
25 services, which was synergistic with the related interest that he and the Yuga
26 executives had in promoting the BAYC NFT collection. His plan would effectively
27
28 15
Id.
19
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 21 of 95 Page ID #:21

1 allow him, the Executive Defendants, and MoonPay (as well as the Promoter
2 Defendants Bieber, Hilton, Paltrow, Post, Pentz, Broadus, Hart, Pall, Taggart,
3 Wilburn Cash, and Tesfaye, who each separately had a financial interest in MoonPay)
4 to all financially benefit from the cross-pollination and promotional efforts for the
5 Yuga Financial Products.
6 81. The Executive Defendants, in conjunction with Oseary, tapped into their
7 collective networks to recruit high-profile celebrities to promote the sale of Yuga’s
8 collections of NFTs, particularly the BAYC NFTs. Together, Oseary, the MoonPay
9 Defendants, and the Promotor Defendants each shared the strong motive to use their
10 influence to artificially create demand for the Yuga securities, which in turn would
11 increase use of MoonPay’s crypto payment service to handle this new demand. At
12 the same time, Oseary could also use MoonPay to obscure how he paid off his
13 celebrity cohorts for their direct or off-label promotions of the Yuga Financial
14 Products.
15 82. Upon information and belief, Oseary also worked as a fixer for Yuga
16 and the Executive Defendants. On June 24, 2022, Yuga filed a trademark
17 infringement claim against artist Ryder Ripps (“Ripps”) related to the sale of Ripps’
18 satirical NFT collection that Ripps has indicated is meant to shed light on the use of
19 racist imagery and tropes within the BAYC NFT collection and its branding.
20 83. In a declaration submitted by Ripps in support of his anti-SLAPP
21 motion, he describes an interaction he had with Defendant Oseary regarding Ripps’
22 claims that the BAYC NFTs contained hidden racist imagery:
23 In December 2021, Guy Oseary, Yuga’s talent manager, called
me to discuss the public statements I had made about Yuga’s neo-Nazi
24
symbolism. On the call, Oseary made a series of vague threats, saying
25 “I can be a nice guy or I can be a not nice guy” and that I would be
better off being friends with Yuga. Oseary suggested that he understood
26
Yuga used racist dog whistles by stating “who am I to judge someone’s
27 art.” Oseary stated that he would help me if I kept silent and that he
could make my life difficult if I did not cooperate. Oseary also offered
28
to introduce me to Kanye West, not realizing that I already worked with
20
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 22 of 95 Page ID #:22

1 him, and later added me to a text message thread with West’s manager.
When I had not posted anything new criticizing Yuga for about one
2
week and unpinned a tweet criticizing Yuga, Oseary left me a voice
3 memo thanking me for my silence.16
4
84. The same day that the BuzzFeed article exposed the identities of Solano
5
and Aronow, which were previously hidden from the public and investors, Oseary
6
posted the following message17 on his Twitter account:
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22 85. Notably, Oseary cropped this photo in an effort to continue to hide the
23 identities of Executive Defendants Ali and Atalay since they were not revealed in the
24 BuzzFeed exposé.
25
16
Declaration of Ryder Ripps, Yuga Labs, Inc. v. Ryder Ripps et. al., No. 2:22-
26 cv-04355-JFW-JEM (C.D. Cal. Oct. 3, 2022) (ECF No. 48-1), at ¶7.
17
27 Guy Oseary (@guyoseary), TWITTER (Feb. 4, 2022, 5:13 PM),
https://twitter.com/guyoseary/status/1489769181532753924?s=20&t=S3hmrMbihK
28 gkSvhVgBWJPw.
21
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 23 of 95 Page ID #:23

1 86. However, four days later, on February 8, 2022, Executive Defendants


2 Atalay and Ali also posted pictures that revealed their true identities in the wake of
3 the outing of Solano and Aronow.18 Oseary, ever the promoter, immediately posted
4 the uncropped picture he previously posted with the following statement:19
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20 87. A week after the full unveiling of the BAYC founders, Yuga CEO
21 Muniz tried to spin the revelation as some sort of wrongdoing by BuzzFeed. On
22 February 16, 2022, Muniz was interviewed by the D3 Network on YouTube, and
23
18
24 Sass (Zeshan Ali), (@SassBAYC), TWITTER (Feb. 8, 2022, 12:46 PM),
https://twitter.com/SassBAYC/status/1491151597682180096?s=20&t=g1mRpxWb
25 WmWNzjxw385m2A; EmperorTomatoKetchup (Kerem Atalay) (@TomatoBAYC),
26 TWITTER (Feb. 8, 2022, 12:46 PM), https://twitter.com/TomatoBAYC/status/1
491151593055879168?s=20&t=g1mRpxWbWmWNzjxw385m2A.
27 19
Guy Oseary (@guyoseary), TWITTER (Feb. 8, 2022, 1:04 PM),
28 https://twitter.com/guyoseary/status/1491155912718897154?lang=en.

22
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 24 of 95 Page ID #:24

1 criticized the BuzzFeed revelation as being “‘very, very dangerous.’”20 Notably,


2 Muniz claimed that exposing the identities of Defendants Aronow and Solano was
3 somehow irresponsible and dangerous because it could potentially attract “‘nefarious
4 characters.’”21 Muniz further complained that BuzzFeed’s story did not have a real
5 purpose: “‘The thing is, is like, if it was for something, it would have been okay . . .
6 . It was a story about “what if” and that sort of leaves me with this feeling just like,
7 it just felt so dangerous. And the only thing that people got out of it was just knowing
8 their real names . . . .’”22 Muniz then claimed that revealing the identities of the Yuga
9 founders would possibly attract the so-called nefarious characters or “crypto whales”
10 who have supposedly “‘put people in severe jeopardy.’”23 Muniz did not provide any
11 details or sources for her concerns, which were entirely speculative to begin with and
12 were undermined by the voluntary disclosures by the Executive Defendants
13 themselves, particularly Defendants Atalay and Ali who were not outed in the
14 BuzzFeed article. Muniz also did not address Oseary’s eagerness to disseminate a
15 picture of Solano and Aronow at a public event on the same day as the “dangerous”
16 revelation. Instead, Muniz attempted to frame the Executive Defendants as victims
17 that deserve sympathy, as opposed to what they really were: a group of “‘nefarious
18 characters’” purposefully hiding their identity while selling their digital assets at
19 artificially inflated prices.
20 3. The Facilitator – MoonPay
21 88. MoonPay is a company founded by Defendant Ivan Soto-Wright, which
22 purports to provide a service that allows investors (particularly high-net-worth
23 investors) to buy and trade NFTs “without hassle.” The mechanics of how such
24
25 20
Scott Chipolina, Yuga Labs CEO: BuzzFeed Outing Bored Apes Founders Was
26 ‘Very, Very Dangerous’, DECRYPT (Feb. 18, 2022), https://decrypt.co/93227/yuga-
labs-ceo-buzzfeed-outing-bored-ape-founders-wvery-dangerous.
27 21 Id.
22
28 23 Id.
Id.
23
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 25 of 95 Page ID #:25

1 transactions are executed or who is ultimately paying to buy the NFTs is unclear.
2 According to Soto-Wright, his business started operations in the United Kingdom
3 (“UK”) before moving into other countries in Europe.
4 89. In an interview with the crypto news outlet Protos, Defendant Soto-
5 Wright disclosed that he “started this in Europe, in the UK, [a]nd open banking wasn’t
6 ready.”24 Soto-Wright went on to reveal that regulators in the UK and/or potential
7 users were “sketched out” by services offered by Soto-Wright’s proto-version of
8 MoonPay, Saveable, a start-up company offering crypto payment services that was
9 ultimately acquired by a UK competitor Plum: “Like, wait, I’m going to give this
10 random service that I’ve never heard of access to my bank account so it can read my
11 transaction history and then move money around. Uh, no thanks. So yeah, I think I
12 learned that the hard way.”25
13 90. Soto-Wright further promoted himself and his crypto payment
14 businesses as having a fiduciary obligation to inform investors about the nature of the
15 financial products those investors purchased because of his services:
16 Like, you know, moving people into a savings product is kind of
like flossing your teeth. It’s like, you need to do that. Right. . . . And I
17
think that’s so good because people are now getting financial education
18 in some way. Like, they’re gonna make some mistakes.
19
They’re gonna invest in stupid stuff. They’re going to invest in
20 meme coins and shit points. And, you know, the reality is part of that,
you know, we need to do our job, uh, in terms of a fiduciary to make
21
sure that the people are doing their own research and, uh, diligencing
22 what they’re buying.26
23
91. Later in the interview, when Soto-Wright was asked about the
24
particulars of why the crypto payment business in the UK “didn’t work,” Soto-Wright
25
26 24
Bootstrapping an ambitious idea in crypto, MIXERGY.COM (Aug. 25, 2021),
27 https://mixergy.com/interviews/moonpay-with-ivan-soto-wright/.
25
28 26 Id.
Id.
24
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 26 of 95 Page ID #:26

1 vaguely claimed that his “waving the white flag” and selling his business to Plum
2 was because he was “focus[ed] too much on the regulatory side of getting our
3 regulatory approval.” Soto-Wright stated that he sold his “regulatory licenses” so
4 that his competitor could “skip the. . . pain . . . that I went through 13 months at the
5 financial conduct authority. So I could hold client money and move money into [a]
6 security. So, uh, that’s what happened. So it wasn’t like, it wasn’t a win for me.”
7 When discussing the “know your customer” responsibilities a business like MoonPay
8 is obligated to abide by, Soto-Wright acknowledged: “[W]e’re selling a financial
9 instrument to some extent, right?”27
10 92. Soto-Wright went on to state that:
11 [T]he reality is we had to turn it on first in Europe because in the United
States, it was just extremely hard, like even getting bank accounts, uh,
12
for crypto. I mean, now it’s getting a little bit better, but even getting,
13 you know, getting bank accounts related to cryptocurrency, I mean,
you would get shut down.
14
15 And a lot of cases, banks just didn’t want to take on the risk. They
didn’t understand it. It was too complex. Uh, but my, that was kind of
16
the reason why I saw this as such a huge opportunity, because I felt that
17 in the longterm banks would change their tune. And that’s exactly what
18 you’re seeing now. Uh, something that was, can kind of consider it.

19 Uh, sketchy or, you know, I’d say like red or Amber on kind of
20 like the traffic light, uh, is now turning green.28

21 93. Soto-Wright further promoted that MoonPay’s diligence regarding its


22 regulatory and fiduciary obligations was part of an effort to “combat money
29
23 laundering” and the “risk of fraud.”
24 94. On May 26, 2021, the Malta Financial Services Authority (“MFSA”)
25 issued the following directive against MoonPay: "The MFSA considers that the
26
27 27
Id.
28
28 Id.
29
Id.
25
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 27 of 95 Page ID #:27

1 Company is not in a position to adhere in full to the requirements of Chapter 3 of the


2 Virtual Financial Assets Rulebook (“the Rules”) and therefore on 26 May 2021, the
3 MFSA directed the Company to cease the on-boarding of new clients with immediate
4 effect.”30 Among other things, Chapter 3 of the Rules, a license holder in Malta must
5 maintain effective risk management and compliance policies and procedures.
6 95. On April 13, 2022, MoonPay announced that “Music, sports, and
7 entertainment VIPs invest $87 million in MoonPay,” stating that “60 influential
8 figures and organizations from the worlds of music, sports, media and entertainment
9 have collectively invested $87M in the company.” Included on this list are Anthony
10 Kiedis of Red Hot Chili Peppers (managed by Oseary), Sound Ventures (Oseary),
11 Defendants Hilton, Bieber (and his manager Scooter Braun), Paltrow (via Kinship
12 Ventures), Post, Pentz, Broadus, Hart, Pall & Taggart (via Mantis VC), Wilburn Cash
13 (via DreamCrew Entertainment), and Tesfaye.31 CAA is also an initial backer of
14 MoonPay via Connect Ventures. Additionally, Defendant Williams has ties to
15 MoonPay via her board membership on Sorare, a collection of fantasy soccer NFTs.
16 * * *
17 96. Oseary and the Executive Defendants sold and/or solicited the sales of
18 Yuga securities by relying on a tried-and-true marketing strategy: celebrity
19 endorsements. With the approval of the Executive Defendants and Ape DAO Board
20 Defendants, Oseary applied this classic strategy to the modern world of blockchain-
21 related financial products and securities.
22 97. Oseary, the MoonPay Defendants, and Promoter Defendants Hilton,
23 Bieber, Paltrow, Post, Pentz, Broadus, Hart, Pall, Taggart, Wilburn Cash, and Tesfaye
24 each had a financial interest in MoonPay. Upon information and belief as investors
25
30
26 Notice, MoonPay Limited (“the Company”) MALTA FIN. SERVS. AUTH. (May
26, 2021), https://www.mfsa.mt/publication/moonpay-limited-the-company/.
27 31 Geoffrey Lyons, Music, sports, and entertainment VIPs invest $87 million in
28 MoonPay, MOONPAY (Apr. 13, 2022), https://www.moonpay.com/blog/investor-
announcement.
26
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 28 of 95 Page ID #:28

1 in MoonPay, these individual Defendants had direct or indirect control over MoonPay
2 and its marketing, particularly with respect to those promotional efforts each of these
3 individual Defendants personally engaged in, respectively.
4 98. Ultimately, “[t]he [BAYC NFT] series serves as a kind of fan club on
5 steroids that encourages owners of the NFTs to move through an ever-growing and
6 exclusive list of events and opportunities.”32 And the Company presents the Bored
7 Ape ecosystem as a brand that is organically beloved by some of the most famous
8 celebrities in the world. But the truth is that the Company’s entire business model
9 relies on using insidious marketing and promotional activities from A-list celebrities
10 that are highly compensated (without disclosing such), to increase demand of the
11 Yuga securities by convincing potential retail investors that the price of these digital
12 assets would appreciate and that, as members of “the club,” these investors would be
13 given exclusive access to additional financial products and benefits.
14 B. The Misleading Promotion and Sale of Yuga Securities
15 99. As Defendant Soto-Wright admitted: the “hardest thing to solve” when
16 building a new company was “getting those customers on your platform.”33 That is
17 precisely where Oseary came in.
18 100. One of Oseary’s first moves was to pull some strings to get a feature
19 article in Rolling Stone magazine, which, upon information and belief, appears to be
20 Oseary’s go-to choice for promoting his business endeavors.34
21
32
22 Shirley Halperin, From Maverick to Mogul, Madonna’s Manager Guy Oseary
Transcends the Music World to Take on NFTs, VARIETY, https://variety.com
23 /2022/music/news/guy-oseary-nft-madonna-u2-manager-1235325286/ (last visited
24 Oct. 27, 2022).
33
MIXERGY.COM, supra.
25 34
For example, a May 4, 2021 article in Rolling Stone magazine titled “You Can
26 Learn How to Perform Directly From Madonna, Now” promoted a business venture
owned by Defendant Oseary: Bright, which, according to Rolling Stone, is “a star-
27 studded educational livestreaming platform that pledges classes and lessons from
28 celebrities.” See https://www.rollingstone.com/pro/news/madonna-bright-celebrity-
classes-guy-oseary-1164390/.
27
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 29 of 95 Page ID #:29

1 101. On November 1, 2021, Rolling Stone published an article titled “How


2 Four NFT Novices Created a Billion-Dollar Ecosystem of Cartoon Apes” (the
3 “Rolling Stone article”), which likened Defendants Solano, Aronow, Atalay and Ali
4 to “internet rock stars” and repeatedly touted the BAYC collection of NFTs and its
5 related metaverse platform.35 The Rolling Stone article candidly notes that
6 Defendants Solano, Aronow, Atalay and Ali “started out with unsharpened goals of
7 capitalizing on a very clear trend.”36
8 102. In conjunction with the publication of the Rolling Stone article (which
9 was a promotional piece about Yuga and its founders Defendants Solano, Aronow,
10 Atalay and Ali in everything but name), the Company collaborated with Rolling Stone
11 magazine on the latter’s collector edition magazine featuring “never-before-seen
12 BAYC artwork.” The issue offered investors the chance to see “early sketches of the
13 swamp club, get to know the original apes, and find out how the creative minds
14 behind one of the most valuable NFT collections in history bring their ideas to life.”
15 Most importantly, the cover of this issue prominently featured a BAYC NFT.
16 According to Rolling Stone’s online store, all 2,500 copies of the Rolling Stone x
17 Bored Ape Yacht Club Limited-Edition Zine were sold out.37
18 103. On November 1, 2021, Oseary posted a picture of the cover of Rolling
19 Stone magazine with the following caption: “First @RollingStone NFT cover…
20 Congrats @BoredApeYC.”38
21
22 35
Samantha Hissong, How Four NFT Novices Created a Billion-Dollar
23 Ecosystem of Cartoon Apes, ROLLING STONE (Nov. 1, 2021), https://www.rolling
24 stone.com/culture/culture-news/bayc-bored-ape-yacht-club-nft-interview-1250461/.
36
Id.
25 37 Rolling Stone x Bored Ape Yacht Club Limited-Edition Zine, ROLLING STONE
26 SHOP, https://shop.rollingstone.com/products/rolling-stone-x-bored-ape-yacht-club-
special-collectors-edition-zine (last visited Nov. 29, 2022).
27 38 Guy Oseary (@guyoseary), TWITTER (Nov. 1, 2021, 9:32 AM),
28 https://twitter.com/guyoseary/status/1455211104448094211?s=20&t=s22ecLQKFg
igc5iiuUVeew.
28
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 30 of 95 Page ID #:30

1 104. Another early instance of Oseary’s solicitation scheme being executed


2 took place during an episode of the Tonight Show aired on November 11, 2021. In a
3 broadcast to millions of viewers, Defendant Fallon promoted MoonPay and the
4 BAYC NFT collection during an interview with Defendant Winkelmann. Fallon
5 announced that he “got his first NFT” through MoonPay, claiming that he “did his
6 homework” on how to purchase an NFT and found MoonPay, which Fallon asserted
7 was “like the PayPal of crypto.” After shilling MoonPay’s services, credibility, and
8 future growth prospects, Fallon announced that he “bought an ape” (i.e., BAYC NFT
9 #599), to which guest Winkelmann expressed approval. Upon information and belief,
10 MoonPay and/or Oseary, along with the Executive Defendants, recruited and paid
11 Fallon and Winkelmann to promote both MoonPay and the BAYC collection of NFTs
12 during this segment on the Tonight Show. Notably, Winkelmann is direct business
13 partners with Oseary in another NFT platform company, WENEW.
14 105. Fallon did not disclose that he had a financial interest in MoonPay or
15 that he was likewise financially interested, directly or indirectly, in the increased sale
16 and popularity of Yuga securities. Nor did EHD or Universal disclose that this
17 purportedly organic segment on the Tonight Show was in reality a paid advertisement
18 for the BAYC collection of NFTs and MoonPay by two celebrities (Fallon and
19 Winkelmann) who are business partners with an investor (Oseary) in both Yuga and
20 MoonPay.39
21 106. That same day, the MoonPay Twitter account posted a clip from the
22 segment with Fallon promoting MoonPay and the BAYC NFTs with a caption
23 stating: “So this just happened. @jimmyfallon reveals to @beeple on the
24
25 39
Adding to the web of interconnectivity amongst the Defendants, in May 2022,
26 Defendants Winkelmann and Ciccone, with the help of MoonPay, together launched
another NFT project: The Mother of Creation. MoonPay promoted this relationship
27 on its Twitter account on May 11, 2022. MoonPay (@moonpay), TWITTER (May 11,
28 2022, 12:50 PM), https://twitter.com/moonpay/status/152447702339312
8451?s=20&t=r7ZcS2DtK_Vt4UPk03r1AQ.
29
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 31 of 95 Page ID #:31

1 #TheTonightShow that he just bought his first Bored Ape by @BoredApeYC with
2 MoonPay! .”40 MoonPay’s statement that “[s]o this just happened”
3 misleadingly suggested to investors that the promotion of MoonPay and the BAYC
4 NFT collection on the Tonight Show was something that occurred spontaneously.
5 Likewise, MoonPay’s statement that Fallon had “just bought his first Bored Ape by
6 @BoredApeYC with MoonPay!” failed to disclose that in truth, Fallon’s segment
7 with Winkelmann was just a promotion of the BAYC NFTs and MoonPay that was
8 orchestrated behind the scenes by Oseary, Soto-Wright, and the Executive
9 Defendants.
10 107. On November 12, 2021, Fallon promoted the BAYC NFT he supposedly
11 “bought,” asking the Yuga official Twitter account if he had “[p]ermission to come a
12 bored?”41 That same day, Defendant Soto-Wright responded to Fallon’s promotion
13 stating: “Congrats @jimmyfallon & @BoredApeYC! We ❤ you from
14 @MoonPayHQ!”42 On November 17, 2021, Fallon again promoted the BAYC
15 NFTs, asking his 53.1 million Twitter followers to “[n]ame my ape! Drop your
16 suggestions below” and tagging “@BoredApeYC #BAYC #BoredApeYachtClub
17 #NFTs.”43 These promotions from Soto-Wright and Fallon failed to disclose that
18 Fallon’s promotion of the BAYC NFTs and MoonPay was not because of Fallon’s
19 genuine interest in BAYC NFTs but rather solely due to the financial interest Fallon
20 shared with Soto-Wright, Oseary, and the Executive Defendants.
21
40
22 MoonPay (@moonpay), TWITTER (Nov. 11, 2021, 3:38 AM), https://twitter.co
m/moonpay/status/1458761049075769351?s=20&t=ntA_vzg_M2poZo2ADKag7g.
23 41
Jimmy Fallon (@jimmyfallon), TWITTER (Nov. 12, 2021, 6:20 AM),
24 https://twitter.com/jimmyfallon/status/1459164143626424321?s=20&t=pnZMGBip
1cJ52yjSd_e3-g.
25 42
Ivan Soto-Wright (@isotowright), TWITTER (Nov. 12, 2021, 7:27 AM),
26 https://twitter.com/isotowright/status/1459181031186173980?s=20&t=pnZMGBip1
cJ52yjSd_e3-g.
27 43
Jimmy Fallon (@jimmyfallon), TWITTER (Nov. 17, 2021, 11:42 AM),
28 https://twitter.com/jimmyfallon/status/1461011913479962630?s=20&t=b7UnEi0yc
K49kgQy3FiFPg.
30
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 32 of 95 Page ID #:32

1 108. Plaintiffs saw the promotions by Fallon and Winkelmann (which were
2 authorized by Defendants Universal and EHD) on the Tonight Show regarding the
3 Company’s collection of BAYC NFTs, as well as Fallon’s promotions on his social
4 media accounts. Plaintiffs were induced to purchase and/or continue to hold Yuga
5 securities as a result of these misleading promotions.
6 109. Notably, MoonPay’s transfer to Fallon of BAYC NFT #599 was the first
7 time that MoonPay ever transacted in a BAYC NFT. In total, MoonPay transferred
8 or sold twenty-three Yuga securities between November 8, 2021 and February 25,
9 2022.
10 110. Upon information and belief, each of the Promoter Defendants received
11 a BAYC NFT and/or other fiat or cryptocurrency from MoonPay and/or Yuga as
12 compensation for fraudulently promoting the sale of the Yuga securities.
13 111. For example, a combined search of the Ethereum Blockchain Explorer
14 (“Etherscan”) and the NFT marketplace OpenSea shows that a wallet owned and
15 controlled by Defendant Post received over $1.4M in ether cryptocurrency directly
16 from MoonPay in addition to a BAYC NFT at the same time Post released a
17 promotion for MoonPay and Yuga disguised as a music video.
18 112. In particular, on October 29, 2021, digital wallet address
19 0xbea020c3bd417f30de4d6bd05b0ed310ac586cc0 labeled as “Post Malone” (the
20 “Post Malone Wallet”) received 75.1 ether (valued at $331,746.76 at the time of the
21 transaction) from wallet address 0xd75233704795206de38cc58b77a1f660b5c60896,
22 which is publicly labeled as “MoonPay” (the “MoonPay Wallet”).44 Two days later,
23
24
25
26 44
Transaction Hash: 0xc50f01603b668b384d8ff595e9ddd1f69b7c97846f3c
27 4fc27852bbca91c25530, ETHERSCAN (Oct. 29, 2021, 8:54 AM),
28 https://etherscan.io/tx/0xc50f01603b668b384d8ff595e9ddd1f69b7c97846f3c4fc278
52bbca91c25530.
31
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 33 of 95 Page ID #:33

1 on October 31, 2021, the Post Malone Wallet received 100 ether or $429,010 from
2 the MoonPay Wallet.45
3 113. On November 15, 2021, Defendant Post uploaded a music video onto
4 his official YouTube channel entitled “One Right Now.”46 This video featured
5 Defendants Post and Tesfaye. The beginning of the video features a segment where
6 Post uses the MoonPay app on his phone to purchase a BAYC NFT.
7 114. That same day, MoonPay promoted the video from Post and Tesfaye on
8 its Twitter account47:
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
45
24 Transaction Hash: 0x339efa1b3a6dff394b79a2703bc6a73e33eb4f8e99f3a02
26e707e251da0ac8d, ETHERSCAN (Oct. 31, 2021, 10:34 AM), https://etherscan.io
25 /tx/0x339efa1b3a6dff394b79a2703bc6a73e33eb4f8e99f3a0226e707e251da0ac8d.
46
26 Post Malone, One Right Now, YOUTUBE (Nov. 15, 2021),
https://youtu.be/Tc0tLGWIqxA.
27 47
MoonPay (@moonpay), TWITTER (Nov. 15, 2021, 1:03 PM), https://twitt
28 er.com/moonpay/status/1460352762798084105?s=20&t=mHWXj4 WYC5OUt2zg9
LWA.
32
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 34 of 95 Page ID #:34

1
115. MoonPay’s statement that “this just happened” misleadingly suggested
2
to investors that the promotion of MoonPay and the BAYC NFT collection within
3
the so-called music video from Defendants Post and Tesfaye was something that
4
occurred because of their genuine interest in the BAYC NFTs. This, and MoonPay’s
5
statement that Post had “aped into @BoredApeYC by purchasing his first NFT with
6
MoonPay,” failed to disclose that this music video was just a promotion of the BAYC
7
NFTs and MoonPay that was orchestrated behind the scenes by Oseary, Soto-Wright,
8
and the Executive Defendants.
9
116. On November 19, 2021, the Post Malone Wallet received another 50
10
ether (worth $214,963.50) from the MoonPay Wallet.48 The last payment that the
11
Post Malone Wallet received from the MoonPay Wallet was on November 21, 2021
12
for 100 ether, which was then worth $426,461.49 In total, the MoonPay Defendants
13
facilitated the payment of $1,402,181.26 to Defendant Post over the course of a
14
month.
15
117. Plaintiffs saw Post’s promotion of the Company’s collection of BAYC
16
NFTs and were induced to purchase and/or continue to hold Yuga securities as a
17
result.
18
118. The MoonPay Wallet also sent BAYC NFTs to other Promoter
19
Defendants during November 2021 in order to solicit the sales of Yuga securities, of
20
which the Company held a perpetual 2.5% ownership interest in and received as much
21
in royalty fees from any subsequent sales of those same NFTs.
22
23
48
24 Transaction Hash: 0x729899f138ab93d6c20707783b62e16e04093e481
d11e45bc2e3648b6ab3773b, ETHERSCAN (Nov. 19, 2021, 2:55 AM),
25 https://etherscan.io/tx/0x729899f138ab93d6c20707783b62e16e04093e481d11e45b
26 c2e3648b6ab3773b.
49
Transaction Hash: 0xc21a66ee9a3d1ddf6f72c780e4165b7e915cf6cfb64
27 209230c9af5993de284f9, ETHERSCAN (Nov. 21, 2021, 1:40 AM), https://ethers
28 can.io/tx/0xc21a66ee9a3d1ddf6f72c780e4165b7e915cf6cfb64209230c
9af5993de284f9.
33
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 35 of 95 Page ID #:35

1 119. For example, on November 26, 2021, during Defendant Khaled’s 46th
2 birthday party he appeared in a live video with Defendant Soto-Wright,50 where they
3 both promoted the sale of BAYC NFTs in a staged transaction that was disseminated
4 through social media. In particular, during the 15-second clip first posted by party
5 attendee and BAYC member Austin Rosen, Soto-Wright supposedly helps Khaled to
6 purchase a BAYC NFT using MoonPay’s app. Khaled can be seen video chatting
7 with celebrity producer SwizzBeats while Soto-Wright pretends to conduct the
8 transaction for Khaled. Notably, Khaled tells SwizzBeats: “I just bought a bored ape.
9 Some shit like . . . do you know about it?” Khaled can also be seen shrugging his
10 shoulders, tilting his head, and gesturing to those viewing the video in a manner that
11 suggested “I don’t know what this is about but I’m going along with it.” Khaled turns
12 his phone and Soto-Wright confirms to SwizzBeats that they were discussing the
13 BAYC NFTs. Soto-Wright then presses “confirm” and tells Khaled “you just bought
14 an ape.” Khaled appeared confused by the interaction in general and did not display
15 any familiarity with the BAYC collection of NFTs at all when he was purportedly
16 buying one of those NFTs for hundreds of thousands of dollars.
17 120. Plaintiffs saw Defendants Khaled and Soto-Wright’s joint promotion of
18 the Company’s collection of BAYC NFTs and were induced to purchase and/or
19 continue to hold Yuga securities as a result.
20 121. According to the outgoing transactions of Yuga securities in the
21 MoonPay Wallet, on November 30, 2021 the MoonPay Wallet transferred BAYC
22 NFT #7380 – valued at 55.5 ether or approximately $220,000 at the time – to wallet
23 address 0xa0ac662f58d3507a6f4a37f8532df201d9010fe7 (the “Khaled Wallet”).51
24
25 50
Lugo.eth (@WWMLD), TWITTER (Nov. 27, 2021, 9:01 AM), https://twitter
26 .com/WWMLD/status/1464640427315892229?s=20&t=p-6BxhtTTTr_HwM5U1Z
ywQ.
27 51
Transaction Hash: 0xdecec07f810b5f2c02489f96121bac5186cdcf51f93
28 0d847024e0780cbafffe4, ERC-721: 7380, ETHERSCAN (Nov. 30, 2021, 4:20 AM),
34
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 36 of 95 Page ID #:36

1 Later that same day, Khaled promoted the BAYC NFTs on his Instagram, announcing
2 that he had joined the BAYC.52
3 122. As this was occurring, on November 28, 2021, the MoonPay Wallet
4 transferred BAYC NFT #4672 to wallet address 0x1616b4c7cdb4093befbcca62
5 f3198993327a8e9e (the “Wilburn Wallet”).53 That same day, Defendant Wilburn
6 Cash posted BAYC NFT #4672 on his Twitter account.54 The next day, on November
7 29, 2021, MoonPay’s TikTok account “moonpayhq” posted a video55 with Defendant
8 Wilburn Cash wherein Wilburn Cash can be seen changing his profile picture on
9 Instagram to BAYC NFT #4672. Wilburn Cash can also be heard saying “yessir” in
10 approval as he endorses the BAYC NFT collection.
11 123. Plaintiffs saw Wilburn Cash’s promotions of the Company’s collection
12 of BAYC NFTs and were induced to purchase and/or continue to hold Yuga securities
13 as a result.
14 124. On December 1, 2021, the MoonPay Wallet transferred BAYC NFT
15 #5384 to wallet address 0xc213e5d1ba49e3069b7ed5ce1f53ed299b966c73, which is
16
17
18
https://etherscan.io/tx/0xdecec07f810b5f2c02489f96121bac5186cdcf51f930d84702
19 4e0780cbafffe4.
52
20 DJ Khaled Just Updated His Instagram Profile Photo To His Bored Ape, THE
BORED APE GAZETTE (Nov. 30, 2021), https://www.theboredapegazette.com/post/dj-
21 khaled-just-updated-his-instagram-profile-photo-to-his-bored-ape-the-full-story-
22 here.
53
Transaction Hash: 0xd8d155d1191c9c9381f1515c8d30483e5c8f01567d
23 c56e358987eb5d2b00d9e5, ERC-721: 4672, ETHERSCAN (Nov. 28, 2021, 5:01 AM),
24 https://etherscan.io/tx/0xd8d155d1191c9c9381f1515c8d30483e5c8f01567dc56e358
987eb5d2b00d9e5.
25 54
Future/Freebandz (@1future), TWITTER (Nov. 28, 2021 12:47 A.M.),
26 https://twitter.com/1future/status/1464833267710889990?s=20&t=b7UnEi0ycK49k
gQy3FiFPg.
27 55
Moonpayhq (@moonpayhq), TIKTOK (Nov. 28, 2021),
28 https://www.tiktok.com/@moonpayhq/video/7035876504391257349?is_from_web
app=v1&item_id=7035876504391257349.
35
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 37 of 95 Page ID #:37

1 labeled as “diplo.eth” (the “Pentz Wallet”).56 That same day, Defendant Pentz
2 promoted the BAYC NFT he received from MoonPay on his Twitter account with
3 2.4 million followers.57 Plaintiffs saw Pentz’s promotion of the Company’s
4 collection of BAYC NFTs and were induced to purchase and/or continue to hold
5 Yuga securities as a result.
6 125. Following his Tonight Show promotion, Fallon continued to promote the
7 collection of BAYC NFTs and to solicit sales thereof on social media. For example,
8 Fallon created a Twitter account for his BAYC NFT #599 with the user name “Bored
9 and Breezy.” On November 23, 2021, Fallon posted the following solicitations for
10 the BAYC NFTs on his official and Bored and Breezy Twitter accounts:58
11
12
13
14
15
16
17
18
19
20
56
Transaction Hash: https://etherscan.io/tx/0x05981522f7f1299678b38f147
21 58921e200512a0292ff777102d0dafca8a11bf3, ERC-721: 5384, ETHERSCAN (Dec.
22 1, 2021, 5:07 AM), https://etherscan.io/token/0xbc4ca0eda7647a8ab7c20
61c2e118a18a936f13d?a=0xc213e5d1ba49e3069b7ed5ce1f53ed299b966c73.
23 57
Diplo (@diplo), TWITTER (Dec. 1, 2021 4:28 P.M.),
24 https://twitter.com/diplo/status/1466157259252240395?s=20&t=B6GM_EYH2EoT
zTfPNF5fmQ.
25 58
Jimmy Fallon (@jimmyfallon), TWITTER (Nov. 23, 2021, 10:24 AM),
26 https://twitter.com/jimmyfallon/status/1463166515289669650?s=20&t=b7UnEi0yc
K49kgQy3FiFPg; Bored and Breezy (@BoredAndBreezy), TWITTER (Nov. 23,
27
2021, 9:46 AM); https://twitter.com/BoredAndBreezy/status/1463156965308354
28 584?s=20&t=gq3WJjWI7a_A4C49ucZPgg.
36
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 38 of 95 Page ID #:38

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26 126. These promotions gave investors the false impression that Fallon was
27 going to be a leader or “captain” in the future BAYC community, suggesting that his
28 continued involvement and leadership with BAYC would grow the BAYC ecosystem
37
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 39 of 95 Page ID #:39

1 and calmly increase the value of their investments therein. Plaintiffs saw Fallon’s
2 promotion of the Company’s collection of BAYC NFTs and were induced to
3 purchase and/or continue to hold Yuga securities as a result of these misleading
4 promotions.
5 127. Fallon also continued promoting BAYC NFTs on the Tonight Show, and
6 EHD and Universal continued to approve that such promotions could be aired on the
7 network without disclaimer. In an even more contrived segment that aired during an
8 episode of the Tonight Show on January 24, 2022, Fallon interviewed Defendant Paris
9 Hilton, and they both misleadingly promoted the BAYC collection of NFTs. Fallon
10 first tried to bolster Hiton’s credentials in the NFT sector by telling the audience and
11 investors that Forbes magazine had named Hilton as one of the “top 50 most
12 influential people in the NFT space.” Fallon then immediately began promoting the
13 BAYC NFT collection with Hilton. Hilton claimed that she had “saw” Fallon’s
14 previous BAYC segment with Winkelmann, and “copied” Fallon’s use of MoonPay
15 to “buy an ape.” Hilton feigned interest in the BAYC NFT collection and claimed to
16 have selected hers because it “reminded” Hilton of herself. When the audience
17 snickered at Hilton’s half-hearted explanation for “purchasing” that particular BAYC
18 NFT (which bore no apparent resemblance to Hilton’s appearance), Fallon jumped in
19 to show off his own BAYC NFT #599, which sported a boat captain’s hat and other
20 funny accessories. Fallon also insisted that he “bought” that particular BAYC NFT
21 because it reminded him of himself, to which the audience agreed and laughed off
22 the exchange. This original segment has been uploaded on the Tonight Show’s official
23 YouTube channel, which has received approximately 496,000 views as of the date of
24 this filing.59 Upon information and belief, the Tonight Show’s channel on YouTube
25 is owned and/or controlled by Defendant Universal.
26
27 59
The Tonight Show, Paris Hilton Surprises Tonight Show Audience Members
28 By Giving Them Their Own NFTs, YOUTUBE (Jan. 24, 2022),
https://www.youtube.com/watch?v=5zi12wrh5So.
38
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 40 of 95 Page ID #:40

1 128. Hilton and MoonPay also promoted Hilton’s appearance on the Tonight
2 Show on their own extensive social media accounts. On January 24, 2022, MoonPay
3 posted that BAYC NFT #1294’s owner “is known to enjoy ‘The Simple Life’ even
4 though they are appearing on prime time TV ‘tonight’. Who could it be? ”60
5 Defendant Hilton responded to this message with a “wink” emoji.61
6 129. The next day, on January 25, 2022, in response to a Twitter post that
7 proclaimed: “Wait @ParisHilton bought my ape?! HOLY @#$%!!!,” Hilton stated:62
8
9
10
11
12
13
14
15 130. The Tonight Show’s official Twitter account posted a 1:44 minute clip
16 on January 25, 2022 of the entire segment promoting the BAYC NFT collection
17 through MoonPay.63 Defendant Fallon was also on Twitter that day reposting his
18 Tonight Show promotion of the BAYC NFT collection along with Defendant Hilton.
19
20 60
MoonPay (@moonpay), TWITTER (Jan. 24, 2021, 6:40 AM),
21 https://twitter.com/moonpay/status/1485623661897961476?s=20&t=F58_qyidVksn
22 SGdXuAyy-A. Notably, Defendant Hilton appeared in a reality TV show called The
Simple Life.
23 61
Paris Hilton (@ParisHilton), TWITTER (Jan. 24, 2021, 10:01 PM),
24 https://twitter.com/ParisHilton/status/1485855428563116034?s=20&t=F58_qyidVk
snSGdXuAyy-A.
25 62
Paris Hilton (@ParisHilton), TWITTER (Jan. 25, 2021, 7:19 PM),
26 https://twitter.com/ParisHilton/status/1486131710895050756?s=20&t=8lDQAVCG
lWl9GRmFFIv1PQ.
27 63
The Tonight Show (@FallonTonight), TWITTER (Jan. 25, 2022, 12:15 AM),
28 https://twitter.com/FallonTonight/status/1485843736345161737?s=20&t=b7UnEi0
ycK49kgQy3FiFPg.
39
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 41 of 95 Page ID #:41

1 In addition to a link to the Tonight Show’s Twitter post, Defendant Fallon included
2 the caption “#WAGMI.”64 The hashtag “#WAGMI” refers to the phrase “we are all
3 gonna make it.” This acronym is widely used by crypto investors to build confidence
4 and as a rallying cry that encourages the community to have hope for the project(s)
5 being discussed. The inclusion of this hashtag with the BAYC NFT solicitation
6 suggested to investors that Defendant Fallon was personally aligned with them
7 instead of promoting the interests of himself and his cohorts Defendants Oseary and
8 Hilton.
9 131. On January 31, 2022, Hilton posted the following message on Twitter
10 with an animated cartoon version of the Fallon interview of Hilton:65
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25 64
Jimmy Fallon (@jimmyfallon), TWITTER (Jan. 25, 2022, 11:15 AM),
26 https://twitter.com/jimmyfallon/status/1486009927999135754?s=20&t=b7UnEi0yc
K49kgQy3FiFPg.
27 65 Paris Hilton (@ParisHilton), TWITTER (Jan. 31, 2021, 10:59 PM),
28 https://twitter.com/ParisHilton/status/1488361241512800258?s=20&t=KDOjfCCoS
8Ch1PbuhBS-xw.
40
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 42 of 95 Page ID #:42

1 132. Hilton’s Twitter promotions on January 25 and January 31, 2022 gave
2 investors the false impression that Hilton: (1) actually bought the BAYC NFT; and
3 (2) was enthusiastically “hanging out in the metaverse” with Fallon and that they
4 were “BoredApeBesties.” In truth, Hilton was only promoting the BAYC NTFs and
5 MoonPay because she was financially motivated to make those statements. Nor did
6 Hilton include an “ad” disclaimer in either of the January 25th or January 31st posts
7 that would disclose to investors that this was a paid advertisement for the BAYC
8 collection of NFTs and MoonPay. Plaintiffs saw the promotions by Fallon and Hilton
9 (which were authorized by Defendants Universal and EHD) on the Tonight Show
10 regarding the Company’s collection of BAYC NFTs, as well as Hilton’s and Fallon’s
11 promotions on their respective social media accounts. Plaintiffs were induced to
12 purchase and/or continue to hold Yuga securities as a result of these misleading
13 promotions.
14 133. Importantly, Hilton and MoonPay purposefully did not disclose Hilton’s
15 direct financial interest in MoonPay and, relatedly, the increased sale of Yuga
16 securities through MoonPay. And again, there was no disclosure from any of the
17 Tonight Show’s production companies, namely Defendants Universal or EHD,
18 regarding Hilton’s and/or Fallon’s financial interests in MoonPay or compensation
19 for promoting the BAYC NFTs. Notably, according to an internal workplace policy
20 mandated by Universal, all employees, including Defendant Fallon, must “disclose
21 and obtain approval for all outside work, financial interests and other personal
22 activities/relationships that may create or appear to create a conflict.”66 The same
23 policy says that employees should not “use company info, resources, time, etc. for
24 personal benefit.” Thus, upon information and belief, Universal knew about Fallon’s
25
66
26 Brian Contreras, Jimmy Fallon hyped his Bored Ape NFTs on ‘The Tonight
Show.’ Conflict of Interest?, L.A. TIMES (Jan. 26, 2022),
27 https://www.latimes.com/business/technology/story/2022-01-26/jimmy-fallon-nft-
28 ape-nbc (discussing Fallon’s potential conflict of interest and providing a link to the
Universal policy).
41
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 43 of 95 Page ID #:43

1 ties to Oseary and Yuga, along with Hilton’s ties to MoonPay, and approved the
2 promotions of BAYC NFTs on the Tonight Show before it was publicly aired without
3 disclaimers. These omissions gave the public the false impression that Hilton had
4 been inspired to purchase a BAYC NTF after hearing that Fallon had organically
5 purchased one of his own, when, in truth, the entire Tonight Show segment was just
6 a paid promotion for the BAYC collection of NFTs and MoonPay. Reporting on this
7 segment noted that a “glossy-eyed Jimmy Fallon conducted one of the most forced
8 interviews” in the history of the Tonight Show during this segment with Defendant
9 Hilton.67 The journalist Max Read described their exchange as “profoundly
10 unsettling.”68
11 134. If the Rolling Stone article put the Company and its founders on the map,
12 Fallon and Hilton’s Tonight Show promotions brought the BAYC directly into the
13 homes of mainstream America. But this was just the beginning for Oseary’s plans
14 for Defendants.
15 135. Other members of Oseary’s network follow a similar pattern of
16 promoting the BAYC collection of NFTs in connection with MoonPay. Indeed,
17 Oseary, in particular, was the architect of Defendants’ plan for marketing the BAYC
18 NFTs. His primary business is managing various high-profile music acts and other
19 entertainment celebrities, including Defendant Madonna Ciccone. Oseary previously
20 ran a successful talent agency called Maverick Management (“Maverick”), which, by
21 itself and in conjunction with talent management powerhouse Live Nation,
22 represented dozens of the most famous athletes and entertainers in the United States.
23
24
25 67
Lucas Kwan Peterson, Can NFTs save the restaurant industry or is the hype
26 just virtual?, L.A. TIMES (Apr. 19, 2022), https://www.latimes.com/food/story/2022-
04-19/bored-ape-nft-restaurant-la-long-beach.
27 68 Max Read, Mapping the celebrity NFT complex, READ MAX (SUBSTACK),
28 (Feb. 2, 2022), https://maxread.substack.com/p/mapping-the-celebrity-nft-comple
x?utm_source=substack&utm_medium=email&utm_content=share.
42
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 44 of 95 Page ID #:44

1 Several of these athletes and entertainers just so also happen to have “joined the
2 BAYC” in the “metaverse” and eagerly promoted that fact to would-be investors.69
3 136. Upon information and belief, the Promoter Defendants each received
4 Yuga Financial Products and/or other forms of consideration as part or all of their
5 compensation for promoting the Yuga securities specifically or the Yuga brand
6 generally.
7 137. For example, on January 31, 2022, Defendant Bieber promoted his
8 purported purchase of BAYC NFT #3001 to his 262 million followers on Instagram.70
9 Reports indicated that Bieber paid approximately $1.29M for his Bored Ape
10 purchase, which was upwards of five times the floor price with similar characters.
11 But this gross overpayment was meaningless to Bieber since, upon information and
12 belief, he did not actually pay any money of his own for this BAYC NFT, but rather
13 received it through a series of transactions for the purpose of compensating him.
14 Instead, Bieber received BAYC NFT #3001 as a form of compensation for promoting
15 the BAYC NFTs and Yuga Financial Products to his hundreds of millions of social
16 media followers.
17 138. On February 7, 2022, Bieber announced that he had “purchased” a
18 second NFT from the Bored Ape collection (i.e., BAYC NFT #3850) for around
19 $470,000. This BAYC NFT is considered to be particularly rare, ranking below 1%
20
21
69
22 For example, Oseary’s Maverick agency represented Defendant Tesfaye, who
also shilled the BAYC brand in the thinly-veiled promotional music video with
23 Defendant Post. Similarly, Ape DAO Board Defendant Alexis Ohanian recruited his
24 wife, tennis superstar Defendant Serena Williams, to promote BAYC NFTs.
Likewise, upon information and belief, Ape DAO Board Defendant Amy Wu utilized
25 her relationships at crypto exchange FTX to recruit world champion athlete
26 Defendant Curry to solicit sales of the BAYC collection of NFTs. None of these
celebrity endorsements of BAYC NFTs disclosed the underlying financial interests
27 and relationships involved.
70
28 Justin Bieber (@justinbieber), INSTAGRAM (Jan. 31, 2022), https://www.insta
gram.com/p/CZZhdyzFITO/?utm_source=ig_web_copy_link.
43
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 45 of 95 Page ID #:45

1 in rarity. Upon information and belief, BAYC NFT #3850 was given to Bieber as
2 compensation for continuing to promote and solicit sales of the Yuga securities.
3 139. Plaintiffs saw Bieber’s promotion of the Company’s collection of
4 BAYC NFTs and were induced to purchase and/or continue to hold Yuga securities
5 as a result of these misleading promotions.
6 140. Around that same time, on January 26, 2022, Defendant Gwyneth
7 Paltrow similarly announced to investors that she had “joined” the BAYC and
8 thanked MoonPay’s fraudulent concierge service.71 Paltrow failed to disclose that
9 she was a MoonPay backer and had a financial interest in its success, which, in turn,
10 caused Paltrow to have a vested interest in the increase in sales of Yuga securities.
11 Plaintiffs saw Paltrow’s promotion of the Company’s collection of BAYC NFTs and
12 were induced to purchase and/or continue to hold Yuga securities as a result of these
13 misleading promotions.
14 141. Defendant Hart also promoted his joining the BAYC with BAYC NFT
15 #9258:
16 While many of his celebrity friends have decided to change their profile
pictures on social media platforms to their BAYC NFTs, Hart chose to
17
approach his purchase more subtly. . . .
18
Interestingly, [Hart] is among the growing list of celebrities
19
who decided to make their first NFT purchases with the help of
20 MoonPay. The crypto firm paid 79.5 ETH or about $200.000 for the
NFT and then transferred it to Hart’s wallet.
21
22 Impressively, despite the fact that BAYC #9258 has several
23 of the rarest properties, Moonpay snagged the NFT below the floor
price. Of course, considering the integrity of the crypto firm and the
24 intended final owner, this shouldn’t come as much of a surprise.72
25
71
26 Gwyneth Paltrow (@GwynethPaltrow), TWITTER (Jan. 26, 2022, 3:33 PM),
https://twitter.com/GwynethPaltrow/status/1486482496883625984?s=20&t=8mace
27 2uHFGDI0GYb5N0aWg.
72
28 Hristina Yordanova, Kevin Hart Joins the Bored Ape Family, DAPPRADAR
(Jan. 24, 2022), https://dappradar.com/blog/kevin-hart-joins-the-bored-ape-family.
44
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 46 of 95 Page ID #:46

1 MoonPay also posted the following picture of Defendant Hart on its Twitter account
2 with the caption “Someone funny aped in today!”:73
3
4
5
6
7
8
9
10
11
12
13
14
15
16 142. Plaintiffs saw the promotions from Defendants Hart and Soto-Wright
17 regarding the Company’s collection of BAYC NFTs and were induced to purchase
18 and/or continue to hold Yuga securities as a result of these misleading promotions.
19 143. On February 8, 2022, Defendant Broadus posted a picture of BAYC
20 NFT#6723, the primates corresponding M1 and M2 Mutant Apes along with Bored
21 Ape Kennel Club Dog #894. Broadus further stated: “And a huge shout out 2 to
22 @moonpay @isotowright @C_Broadus21 and @j1mmyeth for making it happen and
23
24
25
26 73
Swensonk7, Comedian Kevin Hart Joined The Bored Ape Yacht Club,
27 According to Moonpay, THE BORED APE GAZETTE (Jan. 24, 2022),
28 https://www.theboredapegazette.com/post/comedian-kevin-hart-joined-the-bored-
ape-yacht-club-according-to-moonpay.
45
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 47 of 95 Page ID #:47

1 bringing The Who familia together.”74 Plaintiffs saw the promotions from Broadus
2 regarding the Company’s collection of BAYC NFTs and were induced to purchase
3 and/or continue to hold Yuga securities as a result of these misleading promotions.
4 Indeed, Broadus’ promotion was particularly influential on Plaintiffs’ decision to
5 purchase given Broadus’ status as a savvy investor in NFTs.
6 144. A February 15, 2022 article titled “FTX’s Amy Wu: How Crypto and
7 Gamers Can All Get Along”75 described Defendant Wu as a “prominent investor in
8 gaming startups, [who] recently jumped from Lightspeed Ventures to FTX to lead
9 the crypto giant’s new $2 billion Web3 venture fund – a position that will entail
10 spreading bets from FTX’s war chest across new trends in gaming.” Wu explained
11 that she believed “‘[t]he fun is actually around the game mechanics and tokenomics
12 of the game, right? There's ways to make like 100x or 500x return on the token . . .
13 . And that's sort of the focus of a lot of these games, and so it attracts a certain type
14 of player, which tends to be traders that are looking at the game as kind of like
15 almost like a financial instrument.”76 Wu’s “[c]ryptocurrency exchange FTX will
16 funnel a chunk of its growing war chest into a new venture capital arm, FTX
17 Ventures, the firm announced today. The $2 billion VC fund will be led by Amy Wu,
18 previously General Partner at Lightspeed Venture Partners.”77
19 145. Wu previously led Lightspeed’s own investment into FTX, plus FTX
20 and Lightspeed teamed up with Solana Ventures in November 2021 to launch a $100
21
22 74
Snoop Dogg (@SnoopDogg), TWITTER (Dec. 21, 2021 1:57 PM),
23 (https://twitter.com/SnoopDogg/status/1473367019542265858?s=20&t=lAVE0gdv
24 m1Zm3hKnJ4w5bg.
75
Jeff John Roberts, FTX’s Amy Wu: How Crypto and Gamers Can All Get
25 Along, DECRYPT (Feb. 15, 2022), https://decrypt.co/92929/ftx-vc-amy-wu-how-
26 crypto-nft-gamers-can-get-along.
76
Id.
27 77 Andrew Hayward, FTX Launches $2 Billion Web3 Venture Fund Led by
28 Lightspeed’s Amy Wu, DECRYPT (Jan. 14, 2022), https://decrypt.co/90409/ftx-
launches-2-billion-web3-venture-fund-led-lightspeed-amy-wu.
46
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 48 of 95 Page ID #:48

1 million Web3 gaming co-investment fund. In working with FTX founder and CEO
2 Sam Bankman-Fried, who she described as an “extraordinary CEO,” Wu began to
3 see the potential benefits of joining the rising firm. “When I look at what company
4 could potentially have the most impact in the industry, but then also in the world,”
5 she told Decrypt, “I think FTX is one of the most impactful that I've had the pleasure
6 of working with.”78
7 146. On February 18, 2022, FTX Ltd (“FTX”) posted a teaser commercial for
8 its now-bankrupt cryptocurrency exchange, which featured Defendant Curry and an
9 ice sculpture of a Bored Ape. Curry can be seen brushing off flakes of ice from the
10 unmistakable features of the BAYC NFTs. FTX posted this teaser on its official
11 Twitter account with the following caption alluding to the BAYC NFTs: “When
12 learning about crypto, you’ll be anything but bored.”79
13 147. Plaintiffs saw the off-brand promotion from Defendant Curry regarding
14 the Company’s collection of BAYC NFTs and were induced to purchase and/or
15 continue to hold Yuga securities as a result of this misleading promotion.
16 148. On March 16, 2022, the Company announced the formation of the
17 ApeCoin DAO.80 As part of that announcement, Defendant Ohanian stated: “Today
18 we’re making the ‘Club’ bigger with ApeCoin . . . . Web3 is being integrated into our
19 art, music, and culture more and more everyday and it all starts with community. I
20 believe this community will build, expand, partner, and disrupt in a massive way.”81
21
78
22 Id.
79
FTX (@FTX_Official), TWITTER (Feb. 18, 2022, 10:18 AM),
23 https://twitter.com/FTX_Official/status/1494738098034458630?s=20&t=L-3ieebP
24 KlMIdev5LsTbcw.
80
A “DAO” refers to a decentralized autonomous organization, sometimes called
25 a decentralized autonomous corporation. It is an entity that claims to have no central
26 leadership, and is collectively owned and managed by their members.
81
Kate Irwin, ApeCoin Launches for Bored Ape Ethereum NFT Holders with
27 Reddit, FTX, Animoca Execs on Board, DECRYPT (Mar. 16, 2022),
28 https://decrypt.co/95282/apecoin-ape-launches-for-bored-apes-nft-holders-with-
reddit-ftx-animoca-on-board.
47
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 49 of 95 Page ID #:49

1 149. Defendant Wu posted a picture of an BAYC NFT with the following


2 thread on her official Twitter account: “So honored to join the @apecoin DAO board,
3 launched today along with the $APE token.”82 “Love or hate NFTs, they have
4 captured the consumer imagination and continue to be on the onboarding ramp for
5 the mainstream into web3. @BoredApeYC is leading the way as the #1 NFT brand,
6 becoming a household name and building the next gen “Disney” of our generation.”83
7 “@BoredApeYC has led innovation on IP frameworks, like giving NFT holders full
8 commercial rights to their IP without a royalty. This has accelerated awareness rather
9 than leaked value.”84 “More NFT brands are being minted, creating hybrid
10 entertainment and retail empires, licensing their IP and creating 1st and 3rd party
11 merchandise, games, shows, etc. and using hybrid web2/web3 marketing playbooks,
12 leveraging and creating celebrity, and creating culture.”85 “I’m absolutely honored
13 to play a supporting role with @FTX_Official in the future of @ApeCoin DAO at
14 the nexus of culture, gaming, entertainment. LFG! ”86
15 150. Additionally, a combined search of Etherscan and OpenSea shows that
16 a wallet owned/controlled by Defendant Ciccone received BAYC NFT #4988
17 directly from MoonPay. This transaction did not involve a purchase by Ciccone but
18 rather the NFT was simply transferred to her wallet address
19 0x8ea95Bdc5cDddC0b7EbAd841F0c1f2cA6168b6a9 (the “Ciccone Wallet”).
20
21 82
Amy Wu (@amytongwu), TWITTER (Mar. 16, 2022, 4:29 PM), https://twitter
22 .com/amytongwu/status/1504238389737967622?s=20&t=bdw9Sbdaq71NFK8g
F6oQqg.
23 83
Amy Wu (@amytongwu), TWITTER (Mar. 16, 2022, 4:29 PM), https://twitter.
24 com/amytongwu/status/1504238391323418628?s=20&t=bdw9Sbdaq71NFK8gF6o
Qqg.
25 84
Amy Wu (@amytongwu), TWITTER (Mar. 16, 2022, 4:29 PM), https://twitter.
26 com/amytongwu/status/1504238392149745664.
85
Amy Wu (@amytongwu), TWITTER (Mar. 16, 2022, 4:29 PM), https://twitter.
27 com/amytongwu/status/1504238394007764992.
86
28 Amy Wu (@amytongwu), TWITTER (Mar. 16, 2022, 4:29 PM),
https://twitter.com/amytongwu/status/1504238394892771333.
48
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 50 of 95 Page ID #:50

1 According to Etherscan and OpenSea, on March 14, 2022, the MoonPay Wallet first
2 paid 180 ether for BAYC NFT #4988, which at the time was the equivalent $466,461.
3 On March 23, 2022, the MoonPay wallet sent BAYC NFT #4988 to wallet address
4 0x6ef962ea7e64e771d3a81bce4f95328d76d7672b (which appears to have been used
5 as a pass-through wallet).87 Finally, six weeks later, BAYC NFT #4988 was sent to
6 Ciccone’s wallet on May 7, 2022.88 Ciccone received an NFT worth almost a half
7 million dollars from MoonPay for nothing except her statements promoting Yuga
8 securities.
9 151. Transactions within the Ciccone Wallet also reveal that Defendant
10 Ciccone received Otherdeed #4988 directly from the Otherside deployer wallet
11 0x8ea95bdc5cdddc0b7ebad841f0c1f2ca6168b6a9 (the “Otherside Wallet”) on May
12 16, 2022.89
13 152. The Ciccone Wallet also received 100 plots of virtual land in Otherside
14 on August 5, 2022.90
15 153. But there are no free lunches and these were not simple gifts. Rather,
16 upon information and belief, MoonPay was an indirect way for Oseary and the
17
18 87
Transaction Hash: 0xdf3b1b59de370deb5f6105600df55650e3e24cd10127a33
19 f93145b3ca038ac2d, ERC-721: 4988, ETHERSCAN (Mar. 23, 2022, 11:49 AM),
20 https://etherscan.io/tx/0xdf3b1b59de370deb5f6105600df55650e3e24cd10127a33f9
3145b3ca038ac2d.
21 88
Transaction Hash: 0x8935a6169a603b0cc3899c0b98fb40501f6c2a708dc
22 c4e03cdd89d6944eb5b70, ERC-721: 4988, ETHERSCAN (May 7, 2022, 7:44 AM),
https://etherscan.io/tx/0x8935a6169a603b0cc3899c0b98fb40501f6c2a708dcc4e03c
23 dd89d6944eb5b70.
89
24 Transaction Hash: 0x62300078ce92be1784e81e65cd0421a552e7f7
0f1b4931e63f87285086c3c6e6, ERC-721: 4988, ETHERSCAN (May 16, 2022, 5:43
25 PM), https://etherscan.io/tx/0x62300078ce92be1784e81e65cd0421a552e7f70f1b4
26 931e63f87285086c3c6e6.
90
Transaction Hash: 0xcbfb3291091e6dc1e80577526e90dfdf2a438a96
27 03a313989c4833d8d978bc5d, ETHERSCAN (Aug. 5, 2022, 10:54 AM),
28 https://etherscan.io/tx/0xcbfb3291091e6dc1e80577526e90dfdf2a438a9603a313989
c4833d8d978bc5d.
49
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 51 of 95 Page ID #:51

1 Executive Defendants to pay Ciccone to promote and/or solicit sales and re-sales of
2 the Yuga securities.
3 154. An examination of BAYC NFT transactions in the wallet by Ciccone in
4 conjunction with her social media accounts shows that she received this particularly
5 rare and valuable BAYC NFT #4988 before she promoted BAYC to would-be
6 investors. Shortly after MoonPay acquired BAYC NFT #4988 for Ciccone, on March
7 24, 2022, Ciccone posted the following promotion of the BAYC and its related
8 metaverse to her Twitter account:91
9
10
11
12
13
14
15
16
17
18
19
20
21
22 155. Plaintiffs saw the promotion from Ciccone regarding the Company’s
23 collection of BAYC NFTs and were induced to purchase and/or continue to hold
24 Yuga securities as a result of this misleading promotion.
25 156. Neither MoonPay nor Ciccone disclosed that Ciccone’s manager and
26 business partner Oseary had a financial interest in MoonPay and, relatedly, the
27
91
28 Madonna (@Madonna), TWITTER (Mar. 24, 2022, 7:30 PM),
https://twitter.com/Madonna/status/1507183071551971330.
50
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 52 of 95 Page ID #:52

1 increased sale of BAYC NFTs. Further, Ciccone failed to include an “ad” disclaimer
2 in this post to disclose to investors that this was a paid advertisement for the BAYC
3 collection of NFTs and MoonPay (as opposed to a genuine expression of interest in
4 the BAYC collection or gratitude to the MoonPay Defendants for assisting in her
5 “enter[ing] the Metaverse”).
6 157. MoonPay responded to Ciccone’s tweet, stating that the company chose
7 BAYC NFT #4988 for Ciccone because “we heard it call your name And it felt like
8 home.”92
9 158. Ciccone’s promotion of the BAYC NFTs and its related metaverse
10 implied to investors that she personally selected her BAYC NFT because she was
11 genuinely interested in the BAYC ecosystem and wanted to be a part of its growing
12 future. But given MoonPay’s statement, it appears that, in truth, Ciccone did not even
13 bother to choose her BAYC NFT herself, but rather it was selected for her by
14 MoonPay, thus demonstrating that her enthusiasm for the collection of BAYC NFTs
15 was fake.
16 159. In the following weeks, Ciccone further promoted BAYC in several
17 news outlets, including Variety magazine and the London newspaper The
18 Independent. For example, in the July 27, 2022 issue of Variety magazine – which
19 featured Defendant Oseary on the cover with the tagline that stated “Music Mogul of
20 the Year - NFT King: Madonna and U2 Manager Guy Oseary is Leveraging His
21 Success to Become the Next Great Tech Whisperer” – Ciccone insisted that she “‘was
22 hellbent on getting an Ape and really specific about what I wanted: the Ape with a
23 leather motorcycle cap on and multicolored teeth.’”93 Ciccone went on to state: “‘I
24
25 92
MoonPay (@moonpay), TWITTER (Mar. 25, 2022, 1:29 AM),
26 https://twitter.com/moonpay/status/1507273486737281024?lang=en.
93
Shirley Halperin, From Maverick to Mogul, Madonna’s Manager Guy Oseary
27 Transcends the Music World to Take on NFTs, VARIETY (July 27, 2022),
28 https://variety.com/2022/music/news/guy-oseary-nft-madonna-u2-manager-123532
5286/.
51
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 53 of 95 Page ID #:53

1 was told that it was inspired by me, and modeled after me, and it was bought by a
2 woman who’s a fan of mine. She was gonna sell it to me, but it was way too
3 expensive.’”94
4 160. Then, on July 28, 2022, The Independent published an article titled: “‘I
5 was hellbent on getting an Ape’: Madonna annoyed she didn’t get the NFT character
6 she wanted.”95 In addition to echoing the statements from the Variety magazine
7 interview, The Independent reported that the “63-year-old singer has revealed that
8 she was quite ‘mad’ over being beaten to a bid for Bored Ape No 3756.”96
9 161. Defendant Ciccone’s statements about her inability to obtain the BAYC
10 NFT that was her first choice misleadingly suggested to investors that the Yuga
11 securities were in such high demand and so exclusive that even a highly-connected
12 celebrity like Defendant Ciccone could not get any one that she wanted. Likewise,
13 Ciccone’s statement that she wanted to buy a particular BAYC NFT but did not
14 because it was “too expensive” indicated to investors that the BAYC NFT were
15 highly valuable such that one of the most successful and iconic pop singers in the
16 world could not afford to enter the exclusive club on her own terms. These statements
17 were made to induce investors into believing that the Yuga securities were
18 investments that held extraordinary value, growth potential, and would provide future
19 financial opportunities. Indeed, Plaintiffs saw the various promotions from
20 Defendants Ciccone, Oseary, and the MoonPay Defendants regarding the Company’s
21 collection of BAYC NFTs and were induced to purchase and/or continue to hold
22 Yuga securities as a result of this misleading promotion.
23
24
25 94
Id.
95
26 Peony Hirwani, ‘I was hellbent on getting an Ape’: Madonna annoyed she
didn’t get the NFT character she wanted, THE INDEPENDENT (July 28, 2022),
27 https://www.independent.co.uk/arts-entertainment/music/news/madonna-angry-
28 bored-ape-nft-b2132950.html.
96
Id.
52
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 54 of 95 Page ID #:54

1 162. In addition to promoting the large number of A-list celebrities like


2 Ciccone that purportedly “joined the club” (i.e., purchased a BAYC NFT), Oseary
3 used his own personal Twitter account to promote BAYC NFTs.
4 163. Oseary’s Twitter feed is littered with promotions for BAYC NFTs and
5 other Yuga Financial Products. For example, on January 20, 2022, Oseary promoted
6 a tweet from Defendant Serena Williams that posted her BAYC NFT (which she
7 received from her husband, Defendant Ohanian, who also happens to be a member of
8 the Ape DAO board of directors).97 That same day, Oseary similarly promoted a
9 tweet from professional soccer player Neymar da Silva Santos, Jr. that said: “I am an
10 ape! #community #art #BoredApeYC.”98 Notably, not only did these promotions
11 take place on the same day within a few hours, but both BAYC NFTs promoted by
12 Oseary, Williams, and Neymar were the rare “pink” Bored Apes, which were more
13 valuable and indicate a common source of origin.
14 164. Plaintiffs saw the promotions from Defendants Oseary, Williams, and
15 Ohanian regarding the Company’s collection of BAYC NFTs and were induced to
16 purchase and/or continue to hold Yuga securities as a result of this misleading
17 promotion.
18 165. The individual Executive Defendants, under the guise of anonymity,
19 also fraudulently promoted the Yuga securities.
20 166. For example, on April 21, 2021, Defendant Solano promoted the growth
21 potential for the BAYC ecosystem (which could only be accessed through the
22 purchase of a BAYC NFT), stating: “The Bored Ape Yacht Club is more than just an
23 #NFT collection – the NFT grants access to a collaborative art experiment in the form
24
25 97
Serena Williams (@serenawilliams), TWITTER (Jan. 20, 2022, 5:41 AM),
26 https://twitter.com/serenawilliams/status/1484159217791647751?s=20&t=iNbPm5
RANQEpugkz3Orziw.
27 98 Neymar Jr (@neymarjr), TWITTER (Jan. 20, 2022, 10:24 AM),
28 https://twitter.com/neymarjr/status/1484230264293318663?s=20&t=iNbPm5RAN
QEpugkz3Orziw.
53
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 55 of 95 Page ID #:55

1 of a canvas only token-holders can draw on.”99 This statement was misleading in that
2 it suggested to investors that there would be a broader ecosystem for BAYC NFT
3 holders to interact in and that the BAYC brand was poised for significant growth,
4 when, in truth, the BAYC NFTs were just a vehicle to make insiders rich at the
5 expense of investors.
6 167. The next day, April 22, 2021, Solano again touted BAYC NFTs,
7 claiming that these NFTs “double as membership cards to an exclusive club with
8 benefits” and soliciting investors to participate in the BAYC NFT pre-sale on April
9 23, 2021.100
10 168. On August 21, 2021, Defendant Aronow bragged “Not bad for a high
11 school dropout” in response to a post that said “Don’t look now but #BAYC Market
12 Cap just crossed a BILLION.”101 This exchange gave investors the false impression
13 that BAYC NFTs were a sound investment that were poised to continue growing.
14 169. The scheme to promote the BAYC NFTs is not the first time Aronow
15 has been accused of attempting to mislead investors. In May 2021, a crypto company
16 called Bitmex took Aronow to arbitration over a disputed domain name in the action
17 HDR Global Trading Limited v. Aronow, Claim No. FA2104001943672. According
18 to the complaint, Aronow had bought the domain name bitmex.guru in 2018, which
19 Bitmex argued was clearly designed to trick people looking for the real Bitmex
20 website. Aronow did not appear, and the arbitrator ordered that the domain name be
21 transferred after his default in the proceeding.
22
23
99
24 Garga.eth (Greg Solano), TWITTER (Apr. 21, 2021, 8:34 PM),
https://twitter.com/CryptoGarga/status/1385074598241243138?s=20&t=g1mRpxW
25 bWmWNzjxw385m2A.
100
26 Garga.eth (Greg Solano), TWITTER (Apr. 22, 2021, 3:16 PM),
https://twitter.com/CryptoGarga/status/1385356793862397953?s=20&t=g1mRpxW
27 bWmWNzjxw385m2A.
101
28 GordonGoner.eth (Wylie Aronow) (@GordonGoner), TWITTER Apr. 22, 2021,
3:16 PM), https://twitter.com/gordongoner/status/1428938116535042049?lang=en.
54
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 56 of 95 Page ID #:56

1 170. The Company itself also solicited sales at various events like “ApeFest
2 2021” held in New York on November 3, 2021. Significantly, Yuga’s ApeFest 2021
3 event was sponsored and promoted by MoonPay.102 NFT artist, Oseary associate,
4 and Defendant Winkelmann also promoted the ApeFest 2021 event on his Twitter
5 account.103
6 171. Likewise, MoonPay also directly solicited sales of Yuga securities. For
7 example, on January 11, 2022, MoonPay promoted the BAYC Miami Competition
8 and posted the following picture on its Twitter account:104
9
10
11
12
13
14
15
16
17
18
19
20
21
102
22 Bored Ape Yacht Club (@BoredApeYC), TWITTER (Nov. 3, 2021),
https://twitter.com/BoredApeYC/status/1456143639634071556?s=20&t=g1mRpx
23 WbWmWNzjxw385m2A; MoonPay (@moonpay), TWITTER (Nov. 1, 2021, 10:49
24 AM), https://twitter.com/moonpay/status/1455230583702003724?s=20&t=vrAWh
eqx4E0TSLTJj9xpIA.
25 103
Beeple (@beeple), TWITTER (Nov. 3, 2021, 8:49 PM),
26 https://twitter.com/beeple/status/1456106243391623168?s=20&t=g1mRpxWbWm
WNzjxw385m2A.
27 104
MoonPay (@moonpay), TWITTER (Jan 11, 2022, 9:29 AM),
28 https://twitter.com/moonpay/status/1480909703387484165?s=20&t=4E_x-F8TZi8
Sorr7QZls0g.
55
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 57 of 95 Page ID #:57

1 172. In addition to the mural of a Bored Ape with the MoonPay and Yuga
2 corporate logos, the posted image contained a QR code that, if scanned, directed
3 investors to the MoonPay website. On the landing page it states: “Crypto just got
4 easy. A fast and simple way to buy and sell crypto” and there is a button stating “Buy
5 crypto.”105
6 173. The promotional efforts by Oseary, the Executive Defendants, the
7 MoonPay Defendants, and the Promoter Defendants (as well as the celebrity
8 recruitment and solicitation efforts occurring behind the scenes with Oseary, the
9 MoonPay Defendants, and Defendant Adidas) were effective at increasing the
10 popularity of, and interest in, the BAYC NFTs. Following these promotional
11 activities, the floor price and trading volume for BAYC NFTs exploded. On April
12 30, 2022, the day of the BAYC metaverse launch, the floor price for BAYC NFTs
13 reached the maximum price of 144.9 ether (at the time was worth approximately
14 $395,000), which represents an 145% increase from its floor price of 49.5 ether at the
15 start of the Relevant Period. Trading volume also spiked to 12698 ether on April 30,
16 2022 – up almost 280% from the 3345 ether trading volume at the start of the
17 Relevant Period.
18 174. As investor interest in the BAYC NFTs and broader ecosystem was
19 reaching a fevered pitch, Yuga, along with the Executive Defendants, Ape DAO
20 Board Defendants, and Defendant Oseary, launched the ApeCoin token. This was a
21 pure cash grab by those Defendants cloaked in the air of altruistically giving back to
22 the BAYC community of investors.
23 175. In an attempt to shield themselves from liability related to the
24 solicitation and sale of these unregistered tokens, the Executive Defendants formed
25 the ApeCoin DAO, the Ape Foundation, and the Ape DAO Board (which governed
26 and controlled the Ape Foundation). “This organization manages the highbrow assets
27
28 105
See https://www.moonpay.com/.
56
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 58 of 95 Page ID #:58

1 at the back of Bored Apes. But a cautiously coordinated advertising and marketing
2 campaign went to incredible lengths to dissociate ApeCoin from any mainstream
3 corporation . . . . And completely unofficially, Yuga Labs put this all together.”106
4 Put another way, the Executive Defendants created the Ape Foundation and Ape
5 DAO Board in order to maintain the “veneer of plausible deniability — an
6 independent entity allocating tokens to a company and its founders, rather than that
7 company and its founders pumping their own investments.”107
8 176. According to a July 25, 2022 article, “What is ApeCoin and Who is
9 Behind This Cryptocurrency?,” the Company is “responsible for all major projects
10 and acquisitions related to the Bored Ape Yacht Club family. If you want to do
11 something with the intellectual property of the collection, you have to go through the
12 company.” Within that article, Muniz is quoted as having plans to “adopt ApeCoin
13 as the primary currency for all new products and services,” which, as the article notes,
14 “ties the asset’s value to the success of the Bored Ape collection as one all.”108
15 177. On March 16, 2022, Defendants announced the impending launch of
16 ApeCoin, releasing the following statements on the verified ApeCoin Twitter
17 account:
18  “Introducing ApeCoin ($APE), a token for culture, gaming, and
19 commerce used to empower a decentralized community building at the
20 forefront of web3.”109
21  “ApeCoin is owned and operated by the ApeCoin DAO, a decentralized
22 organization where each token holder gets to vote on governance and
23
106
24 What is ApeCoin and Who Is Behind This Cryptocurrency?, VISUALMODO
(July 25, 2022), https://visualmodo.com/what-is-apecoin-and-who-is-behind-this-
25 cryptocurrency/.
107
26 Id.
108
Id.
27 109
ApeCoin (@apecoin), TWITTER (Mar. 16, 2022, 2:02 PM),
28 https://twitter.com/apecoin/status/1504201556165644298?s=20&t=iudEUt2QH4G
UHTXCQ0maNg.
57
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 59 of 95 Page ID #:59

1 use of the Ecosystem Fund. Holding ApeCoin is the only requirement


2 for membership in the ApeCoin DAO.”110
3  “The DAO is supported by Ape Foundation, which was created to act as
4 the legal steward of ApeCoin and administer the decisions made by the
5 ApeCoin DAO community. (Basically someone needs to sign the
6 checks.).”111
7  “62% of the total supply of ApeCoin is allocated to the ApeCoin
8 community, a portion of which (15% of total supply) will be available
9 to claim starting tomorrow at 8:30 am ET.”112
10  “The airdrop claim consisting of 15% of the total supply of ApeCoin
11 will be made available to @BoredApeYC NFT holders (Bored Apes and
12 Mutant Apes, as well as #BAKC dogs paired with either #BAYC or
13 #MAYC).”113
14  “For everyone else who wants to ape in: ApeCoin will be available to
15 all and is expected to begin trading on major crypto exchanges ASAP.
16 We’ll tweet as that happens!”114
17 178. Plaintiff Real saw this solicitation regarding the Company’s native token
18 ApeCoin and was induced to purchase and/or continue to hold Yuga securities as a
19 result of this misleading promotion.
20
21
22 110
ApeCoin (@apecoin), TWITTER (Mar. 16, 2022, 2:02 PM),
23 https://twitter.com/apecoin/status/1504201557147070465.
111
24 ApeCoin (@apecoin), TWITTER (Mar. 16, 2022, 2:02 PM),
https://twitter.com/apecoin/status/1504201557914664962.
25 112 ApeCoin (@apecoin), TWITTER (Mar. 16, 2022, 2:02 PM), https://twitter.com
26 /apecoin/status/1504201558917095427.
113
ApeCoin (@apecoin), TWITTER (Mar. 16, 2022, 2:02 PM), https://twitter.com
27 /apecoin/status/1504201559781089280.
114
28 ApeCoin (@apecoin), TWITTER (Mar. 16, 2022, 2:02 PM), https://twitter.com
/apecoin/status/1504201560624185346.
58
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 60 of 95 Page ID #:60

1 179. According to the Yuga Labs Pitch Deck that, upon information and
2 belief, was used to secure the funding for Yuga, the Company and the Executive
3 Defendants had made staggering profits off of the sales of the Yuga Financial
4 Products in 2021, and the focus for 2022 would be on the Company’s entrance to the
5 metaverse and online gaming.
6 180. The Yuga Labs Pitch Deck signaled the importance of the celebrity
7 endorsements, bragging that “[c]elebrities are buying Apes to signal that they know
8 what’s up.”115 The Yuga Labs Pitch Deck also introduced ApeCoin, stating
9 “APECoin will be the currency of our metaverse. One unifying coin with which to
10 power our app store like marketplace.”116
11 181. Yuga planned for the Otherside MetaRPG to launch with a land sale.
12 These virtual plots of land would purportedly “corresponded to real land” in the Yuga
13 game.117
14 182. The Yuga Labs Pitch Deck stated:
15  The MetaRPG will be made up of 200k land plots total; all launched
16 through Animoca.
17  Genesis drop will be 100k plots.
18 o 30% of that will go to BAYC/MAYC, leaving ~70k for
19 public sale (and then another 100k in follow up drop).
20 o The conservative estimate for the land price is 1 ETH each
21 plot = $200M in primary sales for the genesis drop
22 alone.118
23
24
25
26 115
Yuga Labs Pitch Deck, at *16.
27 116
Id., at *62-*64.
117
28 Id., at *73.
118
Id., at *74.
59
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 61 of 95 Page ID #:61

1 183. The Yuga Pitch Deck also provided the following income statement: 119
2
3
4
5
6
7
8
9
10
11
184. Notably, Yuga’s expenses for “Advertising and Community Building”
12
in 2021 was $2,030,000, whereas the budget for 2022 was $15,250,000. This massive
13
650% increase in expenditures for promotions occurred right around the same time
14
that Defendant Oseary joined the Company as a minority partner.
15
185. ApeCoin is touted as the main cryptocurrency of the BAYC ecosystem
16
and, its sales exploded as a result of Defendants’ promotional efforts.
17
186. For example, on March 16, 2022, the official ApeCoin Twitter account
18
posted the following statement: “Introducing ApeCoin ($APE), a token for culture,
19
gaming, and commerce used to empower a decentralized community building at the
20
forefront of web3.” The BAYC Twitter account replied to this statement. So did the
21
Company’s official account along with a caption that stated: “We’re excited to
22
announce we’re adopting ApeCoin as the primary token for the Bored Ape Yacht
23
Club ecosystem as well as future Yuga products and services.”120 Yuga’s COO,
24
25 119
Id., at *85.
120
26 ApeCoin (@apecoin), TWITTER (Mar. 16, 2022, 2;02 PM),
https://twitter.com/apecoin/status/1504201556165644298?s=20&t=oYZDBOcdZ4
27 V1im5Ls9qmRg; Yuga Labs (@yugalabs), TWITTER (Mar. 16, 2022, 2:08 PM),
28 https://twitter.com/yugalabs/status/1504202913694031884?s=20&t=oYZDBOcdZ4
V1im5Ls9qmRg.
60
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 62 of 95 Page ID #:62

1 Defendant Shoemaker, disseminated all of these particular solicitations through her


2 own Twitter account “@SodaOps.”
3 187. After just one day of trading, the Ethereum-based ApeCoin had a market
4 capitalization of almost $2 billion.
5 188. Upon information and belief, as the Company, Executive Defendants,
6 MoonPay Defendants, and Promotor Defendants were engaged in the aforementioned
7 fraudulent promotions, Defendant Adidas, along with assistance of the MoonPay
8 Defendants and the Executive Defendants, were engaging with other celebrities,
9 influencers, and tastemakers behind the scenes to recruit them into the conspiracy to
10 solicit and sell the Yuga securities through MoonPay.
11 189. On or about March 17, 2022, celebrity jeweler and social media
12 influencer Ben “Baller” Yang made a stunning disclosure regarding the promotion of
13 Yuga securities by the Company, the MoonPay Defendants, and Defendant Adidas,
14 confirming their collective participation in the fraudulent scheme concocted by
15 Oseary and the Executive Defendants. In a now-deleted Twitter Spaces live video,
16 which was memorialized in a YouTube video discussing Ripps’ troubling claims
17 regarding the Company and its founders Defendants Solano, Aronow, Atalay, and
18 Ali and their use of subliminal BAYC NFT collection’s purportedly racist imagery,121
19 Yang describes his own personal experience with the conspiracy as follows:
20 [Yang]: “Real talk, not once, not twice, three times I’ve been offered a
Bored Ape through MoonPay. I’ve had Adidas hit me up in my DMs
21
on Instagram: “Hey Ben, do you want to co-host a space with us? Oh
22 do you own a Bored Ape?” No I fucking don’t. . . . I don’t know what
it was but the fact that some of these super top tier all-star NBA players
23
have them, and I was like this is all cap.122 I mean, there was an NDA
24 they tried to send my agent . . .
25
[Other Speaker]: There’s definitely NDAs in everything they do. . . .
26
27 121
Philion, BORED APE NAZI CLUB, YOUTUBE (June 19, 2022),
28 https://www.youtube.com/watch?v=XpH3O6mnZvw.
122
The term “cap” is slang for an exaggeration or outright lie.
61
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 63 of 95 Page ID #:63

1
[Yang]: But what I’m saying if I was to accept one of the Bored Apes…
2
3 [Other Speaker 2]: They want you to not disclose that they had
purchased the Ape for you.
4
5 [Yang]: Exactly, yeah. You know what the craziest thing about that is
that a lot of celebrities who are going into this are probably just stoked
6
to get the ape and they don’t even realize a lot of them probably a lot of
7 them don’t consult their legal and shit like that beforehand. But they
8 are actually asking you to commit fraud on their behalf.123

9 190. On March 22, 2022, the Company announced that it closed its Series
10 Seed funding round, led by a16z crypto (Defendant Lyons), and, including but not
11 limited, to Sound Ventures (Defendant Oseary), SevenSevenSix (Defendant
12 Ohanian), Artist Capital Management (funded by Defendant Steinbeck’s firm
13 Horizen Labs, which also operated the ApeCoin staking program for Yuga), Hashed
14 (funded by Animoca Brands, which itself was purchased by Yuga), Lightspeed
15 Ventures (Defendant Wu formerly served as a partner before leaving to join FTX
16 Ventures), and FTX Ventures (Defendant Wu served as the web3 investment leader
17 before stepping down from both FTX Ventures and the Ape DAO Board within days
18 of the FTX collapse). Yuga brought in another $450 million during this round. The
19 announcement also revealed its metaverse project, Otherside.124
20 191. The announcement contained the following statements from Defendants
21 Muniz, Lyons, and Oseary, respectively:
22 “Already, a new economy is possible with the IP of Apes, Punks,
23 and Meebits, owned by the community,” said Nicole Muniz, CEO of
Yuga Labs. “The possibilities for blockchain’s impact on culture are
24
25 123
Philion, supra., at 50:40-51:53.
124
26 Press Release, Yuga Labs Closes $450 Million Seed Round of Funding,
Valuing the Company at $4 Billion; Confirms Plans for Metaverse Project, BUSINESS
27 WIRE (Mar. 22, 2022), https://www.businesswire.com/news/home
28 /20220322006088/en/Yuga-Labs-Closes-450-Million-Seed-Round-of-Funding-Val
uing-the-Company-at-4-Billion-Confirms-Plans-for-Metaverse-Project.
62
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 64 of 95 Page ID #:64

1 endless, and so we are building a beautiful, interoperable world for


people to explore and play in. There’s a lot to come.”
2
3 “Yuga Labs has quickly become a web3 culture, gaming, and
entertainment empire,” said Chris Lyons, general partner at a16z
4
crypto. “Mainstream adoption in web3 is accelerating at lightning
5 speed, and Yuga is at the forefront of merging culture and innovation
for everyone to enter the metaverse. We’re thrilled to invest in this
6
brilliant team and their vision, and help forge the next frontier of
7 community-owned entertainment.”
8
“This capital will give Yuga speed to market on many things underway,
9 and bring in new partners with strategic thinking that share the vision,”
10 said Yuga Labs partner Guy Oseary.125

11 192. On March 27, 2022, Defendant Ohanian promoted ApeCoin tokens and
12 the Bored Ape Yacht Club brand in conjunction with the 2022 Academy Awards
13 show, posting a picture of an ApeCoin cufflink and the following text:
14 “#OSCARS2022 MUST-HAVE RED CARPET ACCESSORY
15 @BOREDAPEYACHTCLUB.126 Ohanian posted pictures of himself and Serena
16 Williams on the red carpet at the Oscars and close up pictures of his ApeCoin
17 cufflinks.127
18 193. Plaintiff Real saw Ohanian’s promotion of ApeCoin and the BAYC
19 ecosystem and was induced to purchase and/or continue to hold Yuga securities as a
20 result of this misleading promotion.
21
22
23
125
24 Id.
126
Alexis Ohanian (@alexisohanian), TWITTER (Mar. 27, 2022, 2:53 PM),
25 https://twitter.com/alexisohanian/status/1508200457214201858?s=20&t=We5Uww
26 M3WMDYkGHgb3jgZg.
127
Id.; see also Chris Katje, Here’s How Alexis Ohanian Sported The Bored Ape
27 Yacht Club at The Oscars, BENZINGA (Mar. 28, 2022), https://www.benzinga.com/
28 markets/cryptocurrency/22/03/26328054/heres-how-alexis-ohanian-sported-the-
bored-ape-yacht-club-at-the-oscars2.
63
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 65 of 95 Page ID #:65

1 194. On March 29, 2022 FTX uploaded the full commercial with Defendant
2 Curry to its official YouTube channel.128 While the commercial itself was for FTX,
3 there were multiple not-so-hidden references to the BAYC collection of NFTs.
4 Notably, the thumbnail of the video prominently features Curry and the Bored Ape
5 sculpture:
6
7
8
9
10
11
12
13
14
15
16 195. The slogan for this campaign also contained the same BAYC reference
17 (i.e. “bored”) that was in the teaser commercial. The commercial itself showed Curry
18 in various “everyday” activities while a narrator harasses Curry for advice about
19 cryptocurrency and what tokens to buy. The most significant of these segments is
20 when Curry can be seen working on an ice sculpture of a Bored Ape. While it is
21 unclear whether other NFT projects are being referenced in this commercial, it is
22 obvious that Curry is concurrently promoting BAYC NFTs given the unmistakable
23 similarity to the art style of the BAYC NFT collection and the ice sculpture that Curry
24 is working on. This promotion did not include any disclosure or disclaimer
25 concerning the connection between FTX and Yuga via Defendant Wu, who had
26 significant financial interest in both companies. Instead, the commercial encouraged
27
128
28 FTX Official, Steph Curry Is Not a Crypto Expert, YOUTUBE (Mar. 29, 2022),
https://www.youtube.com/watch?v=gsy2N-XI04o.
64
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 66 of 95 Page ID #:66

1 uninformed investors to invest into digital assets like the BAYC NFTs, while at the
2 same time giving a “wink” disclaimer that this was not financial advice to provide
3 Curry with plausible deniability regarding his promotion of the Yuga Financial
4 Products.
5 196. Defendant Curry also promoted BAYC NFT #7990 as his social media
6 profile picture. The NFT itself was transferred to wallet address
7 0x3becf83939f34311b6bee143197872d877501b11, which is labeled “SC30.” Upon
8 information and belief, this wallet is owned or controlled by either Defendant Curry
9 or Curry’s investment company “SC30” (or both). According to OpenSea, BAYC
10 NFT #7990 was transferred to a wallet that has been publicly labeled as “SC30.”129
11 197. Plaintiffs saw Curry’s thinly-veiled promotion of the collection of
12 BAYC NFTs in the FTX commercial, as well as Curry’s promotion of Yuga securities
13 on his social media account. Plaintiffs were induced to purchase and/or continue to
14 hold Yuga securities as a result of this misleading promotion.
15 198. Approximately one month later, on April 26, 2022, Defendant Oseary
16 submitted a proposal to the Ape DAO titled: “AIP Idea: Guy Oseary as ApeCoin
17 Representative,” which essentially requested that Oseary be given up to 1% of the
18 Ecosystem Fund as a slush fund for him to “utilize on behalf of the APE
19 Foundation.”130 The proposal is listed below:
20 ABSTRACT
This document proposes to make me, Guy Oseary, a
21
representative of ApeCoin. This role will make it my job to support
22 ApeCoin through impactful partnerships and initiatives. I will not
receive any payment for my services.
23
24
25 129
Bored Ape Yacht Club #7990, OPENSEA, https://opensea.io/assets/eth
26 ereum/0xbc4ca0eda7647a8ab7c2061c2e118a18a936f13d/7990 (last visited Dec. 4,
2022).
27 130 guyoseary, AIP Idea: Guy Oseary as ApeCoin Representative, APECOIN.COM
28 (Apr. 26, 2022), https://forum.apecoin.com/t/aip-idea-guy-oseary-as-apecoin-
representative/5153.
65
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 67 of 95 Page ID #:67

1 * * *
2
Web3 is more than just digital. The coin that will power your
3 metaverse experience will also be powering your real-life experience.
You could earn ApeCoin in the metaverse and use it as payment to
4
attend a show by your favorite artist. Pay for a hotel with it one day and
5 meet your friends there virtually. We are at the very early days here.
Keeping ApeCoin solely in the metaverse would limit it.
6
7 The request is for an allocation of 1% of the Ecosystem Fund
8 for me to spend strategically on opportunities and partnerships that
benefit the brand and community. These initiatives could include – but
9 are not limited to – events, partnerships, and projects across gaming,
10 TV, film, and music. To execute on this successfully, it is important
for me to be able to engage in individual negotiations discreetly,
11 driving more favorable terms and costs that result in higher ROI.
12
RATIONALE
13 To promote a diverse and self-sustaining ecosystem, ApeCoin
14 should be so ubiquitous that it’s part of mainstream culture. It’s my core
belief that ApeCoin can lead the way in bringing more people,
15 companies, and brands to web3, and that we can do so in an inclusive
16 way that reflects the ApeCoin DAO values.

17 A LITTLE ABOUT ME
18 My experience in working with brands across entertainment and
tech allows me to be uniquely positioned to make strategic decisions
19 and leverage my network to close exceptional deals for ApeCoin.
20
I am an entrepreneur, tech investor, and talent manager. As a
21 teen, I started my career as an A&R executive and later as a partner in
22 Maverick Records. We sold over 100 million albums before selling the
company to Warner Music.
23
24 I’ve been working with and supporting artists ever since — for
over 30 years now. My passion and personal interests over the last few
25 decades have placed me at the intersection of entertainment and tech.
26 I’ve been investing with my partner and friend Ashton Kutcher, who is
also my co-founder in A-Grade Investments, Sound Ventures, and
27 Sound Ventures Blockchain. Our early-stage investments include
28
66
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 68 of 95 Page ID #:68

1 Airbnb, Uber, Spotify, Calm, Robinhood, Gitlab, Duolingo, Superrare,


Opensea, and many others.
2
3 I am also currently working with or a partner with some of the
best NFT talent, including Bored Ape Yacht Club, Mutant Ape Yacht
4
Club, CryptoPunks, Meebits, World of Women, Sandbox, Pixel Vault,
5 Beeple, and 10KTF.
6
Empowering artists and protecting them from day 1 has been a
7 priority for me. Today, one of the most powerful tools to enable that is
8 web3. I was fortunate to be one of the contributors to ApeCoin. Like
you, I was inspired by this amazing community and I’ve been
9 supporting it from the moment I understood how far it can go. I want it
10 to succeed and I’m incentivized to do all that I can to ensure that it does.

11 SPECIFICATIONS
12 Up to 1% of the Ecosystem Fund as a budget for me to utilize on behalf
of the APE Foundation.
13
14  This will only be spent on purchases and deals that directly
benefit the APE Foundation.
15  Any ROI gained from deals I make will go back into the
16 Ecosystem Fund.
 Any ApeCoin from this budget that is not used during the
17 specified period will be returned to the Ecosystem Fund.
18  I will not receive any payment for my services.
 I will consult with the Board about potential deals.
19
 Details on all purchases and deals that I make will be made
20 fully available to the ApeCoin DAO community after the fact
via quarterly transparency reports that detail how much was
21
spent, on what, and why.
22  This is separate from the budgets allocated in AIP-3.
23
STEPS TO IMPLEMENT
24
25 1. Cartan to set up a separate Coinbase account and transfer 1% of
the Ecosystem Fund.
26 2. Set up the account so that one of the ApeCoin DAO Board
27 members must approve transactions.
3. Execute commercial services agreement with Ape Foundation.
28
67
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 69 of 95 Page ID #:69

1 TIMELINE
This would go into effect immediately if this AIP passes and
2
would last until the next fiscal calendar closes at the end of 2023.
3
OVERALL COST
4
Up to 1% of the Ecosystem Fund, from when the proposal passes
5 through Dec 31, 2023.131
6
199. On April 27, 2022, Defendant Adidas promoted the BAYC and the
7
Company’s metaverse project with the launch of its own NFT project called “adidas
8
Originals: into the Metaverse (Phase 2).132 The NFT itself featured a moving image
9
of a Bored Ape avatar wearing an Adidas jumpsuit. The back of the image
10
prominently featured the Company’s BAYC logo.
11
200. On April 30, 2022, a few days after the Adidas promotion and Oseary’s
12
proposal, the Company minted the virtual land for its Otherside metaverse. Within
13
24 hours, Yuga, Oseary, the Executive Defendants, and the Ape DAO Board
14
Defendants generated more than $561 million from Otherside’s “Otherdeed” NFT
15
sales. Each Otherdeed NFT is meant to be the “key to claiming land” in Otherside
16
and its metaverse game.
17
201. Some 55,000 NFTs were minted at 305 APE each, which means each
18
Otherdeed cost about $5,800 given ApeCoin’s price (approximately $19) at time of
19
mint. Yuga raked in over $318.7 million from this mint alone. To add insult to injury,
20
the minting process itself was poorly planned and executed, resulting in investors
21
having to pay over approximately $8,000 in Ethereum gas fees, making the true cost
22
being around $13,000 per Otherdeed.
23
24
25
26 131
Id.
27 132
adidas Originals: into the Metaverse (Phase 2), OPENSEA,
28 https://opensea.io/assets/ethereum/0x28472a58a490c5e09a238847f66a68a47cc76f0
f/1 (last visited Dec. 4, 2022).
68
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 70 of 95 Page ID #:70

1 202. According to data from CryptoSlam, Otherdeed has already seen over
2 $242 million in total secondary volume traded. Of that figure, over $190 million was
3 on OpenSea.133
4 203. Due to the high number of NFTs and higher demand, the Otherdeed
5 mint, which began at 9:00 pm EST Saturday night, immediately caused an Ethereum
6 gas134 war. According to reports on the Otherdeed sale, “[t]raffic on block explorer
7 Etherscan also led to reports that the site wasn’t working for many users. Worse, gas
8 fees suddenly spiked to thousands of dollars per transaction.”135 Indeed, while some
9 were able to get their transactions processed within a few hours for a couple hundred
10 dollars in gas fees, “others reported paying upwards of $4,000 for a single transaction.
11 (The average gwei, or price of Ethereum gas, over the course of the night was over
12 6,000, roughly 100 to 200 times normal.).”136
13 204. Otherside-related transactions have consumed over 64,000 ETH in gas
14 fees at the time of this writing, which is almost $180 million. Critics of Yuga’s land
15 sale pointed out that fees would not have to be that bad had Yuga implemented a few
16 backend optimizations.
17 205. Defendant Pall claimed to have bought two BAYC NFTs along with
18 Defendant Taggart. Pall touted the “power moves” that Yuga was making giving
19 investors IP rights “to the people that bought those things.” “While . . . they are
20
21 133
Kate Irwin, Yuga Labs See $561 Million in Otherside Ethereum NFT sales
22 Within 24 hours, DECRYPT (May 1, 2022), https://decrypt.co/99156/yuga-labs-sees-
561-million-in-otherside-ethereum-nft-sales-within-24-hours
23 134
The term “gas” in the crypto context refers to a unit describing the amount of
24 computational power needed to execute specific operations on the network. Because
every Ethereum transaction (which included ApeCoin and Yuga NFT transactions)
25 consumes computational resources, transactions come with a cost. Gas is the fee
26 needed to conduct an Ethereum transaction.
135
Kate Irwin, Yuga Labs Sees $561 Million in Otherside Ethereum NFT Sales
27 Within 24 Hours, DECRYPT (May 1, 2022), https://decrypt.co/99156/yuga-labs-sees-
28 561-million-in-otherside-ethereum-nft-sales-within-24-hours.
136
Id.
69
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 71 of 95 Page ID #:71

1 incredibly expensive, it was a . . . fun social experiment and I think that’s a lot of
2 what you are seeing in crypto.”137 Plaintiffs saw the promotions with Defendants Pall
3 and Taggart, and were induced to purchase and/or continue to hold Yuga securities
4 instead of selling as a result of this misleading promotions.
5 206. On September 7, 2022, the Ape Foundation announced that it was
6 seeking a three-month extension for the Ape DAO Board Defendants’ six-month
7 inaugural term.138 In the letter to the “ApeCoin Community,” the Ape Foundation
8 stated that “the community hasn’t submitted any viable AIPs specifying what this
9 handover looks like, who might take over, or how we might conduct an election. This
10 suggests the original election specifications were ambiguous.”139 Accordingly, the
11 Ape Foundation proposed to extend the term, claiming that keeping the Ape DAO
12 Board Defendants in their positions would “provide continuity and stability: the
13 Foundation doesn’t just execute what the community wants – it makes sure we are
14 compliant with legal and regulatory requirements and guidance so we can operate
15 effectively.”140 The letter proposal concluded by directing investors with questions
16 to speak with Ape DAO Board Defendant Bajwa.
17 207. That same day, Defendant Wu posted the following message on her
18 Twitter account: “Grateful for a dynamic 6 month serving on the first @apecoin DAO
19 Special Council! We are asking the community for an extension of 3 months to focus
20 on ironing out a first election process that balances continuity, fairness, and
21
22
23 137
Banklesshq (@banklesshq), TIKTOK (June 21, 2022),
24 https://www.tiktok.com/@banklesshq/video/7111625644068326699?is_from_weba
pp=v1&item_id=7111625644068326699.
25 138
Swensonk7, The Ape Foundation Announced That Its Term Is Almost Up and
26 That They Want a 3 Month Extension, THE BORED APE GAZETTE (Sep. 7, 2022),
https://www.theboredapegazette.com/post/the-ape-foundation-announced-that-its-
27 term-is-almost-up-and-that-they-want-a-3-month-extension.
139
28 Id.
140
Id.
70
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 72 of 95 Page ID #:72

1 transparency.”141 Wu’s post linked to “AIP-113: Extending AIP-1 – the DAO


2 Process,” which “propose[d] a three-month extension of the terms laid out in AIP-1
3 to (1) provide time for the development of a proper and thorough Ape Foundation
4 election framework and process; (2) allow the community to better understand and
5 ultimately engage with whatever process emerges; and (3) enable the DAO to
6 continue functioning coherently beyond September 30.”142
7 208. On November 11, 2022 Defendant Wu resigned from her position as the
8 leader of FTX’s investment arm following the revelations that FTX executives had
9 been improperly commingling investor assets and receiving personal loans from the
10 FTX hedge fund, Alameda Research. Replacement CEO John Ray III (known as the
11 person brought in to clean up the Enron bankruptcy), in a filing with the Delaware
12 bankruptcy court, stated the following regarding FTX’s Lehman Brothers-style
13 collapse that occurred during Wu’s tenure:
14 Never in my career have I seen such a complete failure of corporate
controls and such a complete absence of trustworthy financial
15
information as occurred here. From compromised systems integrity
16 and faulty regulatory oversight abroad, to the concentration of control
in the hands of a very small group of inexperienced, unsophisticated
17
and potentially compromised individuals, this situation is
18 unprecedented.143
19
20 141
Amy Wu (@amytongwu), TWITTER (Sep. 7, 2022 1:20 P.M.),
21 https://twitter.com/amytongwu/status/1567563499156676608?s=20&t=ptw4dASRf
22 -r2XQWNZIM-EQ
142
btang, AIP-113: Extending AIP-1 – the DAO Process, APECOIN.COM (Sep. 7,
23 2022), https://forum.apecoin.com/t/aip-113-extending-aip-1-the-dao-process/8236.
24 Notably, AIP-113 was submitted by user “btang” and authored by Animoca. Btang
also proposed the staking protocol for ApeCoin. Btang is also the founder of the
25 Cartan Group LLC, a small consulting company operating out of the Cayman Islands,
26 which, pursuant to AIP-1, receives $150,000 per month in consulting fees.
143
Michelle Chapman, FTX’s new CEO worked on Enron’s bankruptcy but he’s
27 still never seen such a ‘complete failure’ and ‘absence of trustworthy financial
28 information’, FORTUNE (Nov. 17, 2022), https://fortune.com/2022/11/17/ftx-
bankruptcy-filing-john-ray-never-seen-complete-failure-sam-bankman-fried/.
71
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 73 of 95 Page ID #:73

1 209. Wu was a senior executive at FTX during the time it suffered from an
2 “unprecedented and complete failure of corporate controls.” Eight days after
3 resigning from FTX, on November 19, 2022, Wu announced that she would not
4 continue to serve as an Ape DAO Board member after the expiration of her one-year
5 term in December 2022. The announcement further disclosed that Defendants
6 Steinbeck and Bajwa also resigned from the Ape DAO Board under the same terms.
7 C. The Dump – The price of Yuga Securities plummets
8 210. The meteoric rise of the BAYC NFTs did not last long, and the floor
9 price of the BAYC NFT collection began to deflate immediately after the failed
10 launch of the BAYC metaverse and botched sale of virtual land in the Otherside, on
11 April 30, 2022.
12 211. In the following months, the floor price of the BAYC NFT fell to a
13 Relevant Period low of 50 ether (i.e., approximately $62,000) on November 14, 2022.
14 Trading volume decreased to a mere 899 ether, down 92.9% from its height at the
15 launch.
16 212. Similarly, the price of ApeCoin tokens dropped to a Relevant Period low
17 of $2.70 on November 13, 2022. This was down approximately 90% from its all time
18 high price of $26.91 on April 28, 2022. Trading volume of ApeCoins decreased to
19 $160.7 million, down a staggering 99.7% from its high point during the Relevant
20 Period of $5.5B on April 28, 2022:
21
22
23
24
25
26
27
28
72
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 74 of 95 Page ID #:74

1
2
3
4
5
6
7
8
9
10
11
12 213. Likewise, the floor price of the Otherdeed NFT went from a Relevant
13 Period high of 4.7 ether (about $13,200) on May 1, 2022 all the way down to a low
14 of 0.8 ether (worth only $1,000) on November 15, 2022. Trading volume decreased
15 to a mere 788 ether, which was a step drop of 99.7% down from its height around the
16 launch.
17 V. CLASS ACTION ALLEGATIONS
18 214. Plaintiffs bring this action, individually and on behalf of a nationwide
19 Class, pursuant to Federal Rules of Civil Procedure 23(a), 23(b)(2), and/or 23(b)(3),
20 defined as follows:
21 All persons who, during the Class Period, purchased the Yuga
securities and were subsequently damaged thereby.
22
23 215. The Class Period is defined as the period between April 24, 2021, and
144
24 the present.
25 216. Excluded from the Class are: (a) Defendants; (b) Defendants’ affiliates,
26 agents, employees, officers and directors; (c) Plaintiffs’ counsel and Defendants’
27
144
Plaintiffs reserve the right to expand or amend the Class Period based on
28 discovery produced in this matter.
73
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 75 of 95 Page ID #:75

1 counsel; and (d) the judge assigned to this matter, the judge’s staff, and any member
2 of the judge’s immediate family. Plaintiffs reserve the right to modify, change, or
3 expand the Class definition set forth above based on discovery and further
4 investigation.
5 217. Numerosity: The Class is so numerous that joinder of all members is
6 impracticable. On December 1, 2022, there were more than 103,000 unique account
7 holders of Yuga securities.
8 218. Commonality: Common questions of law and fact exist as to all
9 members of each Class. These questions predominate over questions affecting
10 individual Class members. These common legal and factual questions include, but
11 are not limited to:
12 a. Whether the Executive Defendants with the Promoter Defendants
13 fraudulently marketed the Yuga securities;
14 b. Whether Executive Defendants conspired to artificially inflate the
15 price of BAYC NFTs and then sell their Yuga securities to unsuspecting investors;
16 c. Whether Defendants have been unjustly and wrongfully enriched
17 as a result of their conduct;
18 d. Whether the proceeds that the Defendants obtained as a result of
19 the sale of the Yuga securities rightfully belong to Plaintiffs and Class members;
20 e. Whether Defendants should be required to return money they
21 received as a result of the sale of Yuga securities to Plaintiffs and Class members;
22 and
23 f. Whether Plaintiffs and Class members have suffered damages,
24 and, if so, the nature and extent of those damages.
25 219. Typicality: Plaintiffs have the same interest in this matter as all Class
26 members, and Plaintiffs’ claims arise out of the same set of facts and conduct as the
27 claims of all Class members. Plaintiffs’ and Class members’ claims all arise out of
28
74
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 76 of 95 Page ID #:76

1 uniform misrepresentations, omissions, and unlawful, unfair, and deceptive acts and
2 practices related to the sale of Yuga securities.
3 220. Adequacy: Plaintiffs have no interests that conflict with the interests of
4 the Class and are committed to pursuing this action vigorously. Plaintiffs have
5 retained counsel competent and experienced in complex consumer class action
6 litigation. Accordingly, Plaintiffs and their counsel will fairly and adequately protect
7 the interests of the Class.
8 221. Superiority: A class action is superior to all other available means of
9 fair and efficient adjudication of the claims of Plaintiffs and members of the Class.
10 The injury suffered by each individual Class member is relatively small compared to
11 the burden and expense of individual prosecution of the complex and extensive
12 litigation necessitated by Defendants’ conduct. It would be virtually impossible for
13 individual Class members to effectively redress the wrongs done to them. Even if
14 Class members could afford individualized litigation, the court system could not.
15 Individualized litigation would increase delay and expense to all parties, and to the
16 court system, because of the complex legal and factual issues of this case.
17 Individualized rulings and judgments could result in inconsistent relief for similarly
18 situated individuals. By contrast, the class action device presents far fewer
19 management difficulties, and provides the benefits of single adjudication, economy
20 of scale, and comprehensive supervision by a single court.
21 222. Defendants have acted or refused to act on grounds generally applicable
22 to the Class, thereby making appropriate final injunctive relief and corresponding
23 declaratory relief with respect to the Class as a whole.
24 VI. PRESUMPTION OF RELIANCE
25 223. Plaintiffs will rely, in part, upon the presumption of reliance established
26 by the fraud-on-the-market doctrine in that:
27 (a) Defendants made public misrepresentations or failed to disclose
28 material facts during the Class Period;
75
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 77 of 95 Page ID #:77

1 (b) the omissions and misrepresentations were material;


2 (c) Yuga securities are traded in an efficient market;
3 (d) the Company’s securities were liquid and traded with moderate to
4 heavy volume during the Class Period;
5 (e) the Company’s securities traded on various cryptocurrency
6 exchanges in the United States;
7 (f) the Company was covered by securities analysts;
8 (g) the misrepresentations and omissions alleged would tend to
9 induce a reasonable investor to misjudge the value of the Company’s securities; and
10 (h) Plaintiffs and members of the Class purchased, acquired, and/or
11 sold Yuga securities between the time the Defendants failed to disclose or
12 misrepresented material facts and the time the true facts were disclosed without
13 knowledge of the omitted or misrepresented facts.
14 224. Five factors are typically applied to determine whether a particular
15 security meets the “efficient market” requirement: (1) whether the security trades at
16 a high volume; (2) whether securities analysts follow and report on the security; (3)
17 whether the security has market makers and arbitrageurs; (4) whether the Company
18 is eligible to file SEC registration forms S-3; and (5) whether there are empirical facts
19 showing a cause-and-effect relationship between unexpected corporate events or
20 financial releases and an immediate response in the stock market. See ScripsAmerica,
21 Inc. v. Ironridge Glob. LLC, No. CV14-03962 MMM(AGRx), 2015 WL 12747908,
22 at *19 (C.D. Cal. Mar. 26, 2015). As discussed more thoroughly above, these factors
23 weigh in favor of finding that the Yuga securities were traded in an efficient market.
24 For example, ApeCoin trades a daily average volume of $183.7M.145 Next, as
25 detailed herein, securities analysts reported on the Yuga securities at issue repeatedly
26 throughout the Class Period. Each of these analyst reports was publicly available to
27
145
28 ApeCoin, BEINCRYPTO https://beincrypto.com/price/apecoin/ (last visited
Dec. 4, 2022).
76
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 78 of 95 Page ID #:78

1 investors. And the price of Yuga securities changed in relation to public statements
2 or reports about the activities of the Company. Indeed, the market price of Yuga
3 securities reacted promptly to the dissemination of public information regarding the
4 Company. The Yuga securities also used the Executive Defendants and Ape DAO
5 Board Defendants to serve as market makers for Yuga securities liquidity.
6 VII. CAUSES OF ACTION
7 FIRST CAUSE OF ACTION
8 Violation of the California Unfair Competition Law
Cal. Bus. & Prof. Code §17200
9 (Against All Defendants)
10 225. Plaintiffs restate and reallege all preceding allegations above as if fully
11 set forth herein.
12 226. Plaintiff Titcher is a resident of the State of California.
13 227. At all relevant times there was in full force and effect the California
14 Unfair Competition Law (“UCL”), Cal. Bus. & Prof. Code §17200, et seq., which
15 prohibits, inter alia, “any unlawful, unfair, or fraudulent business act or practice” and
16 “unfair, deceptive, untrue, or misleading advertising.”
17 228. Yuga engaged in business acts and practices deemed “unfair” under the
18 UCL, because of the conduct, statements, and omissions described above. Unfair
19 acts under the UCL have been interpreted using different tests, including: (1) whether
20 the public policy which is a predicate to a consumer unfair competition action under
21 the unfair prong of the UCL is tethered to specific constitutional, statutory, or
22 regulatory provisions; (2) whether the gravity of the harm to the consumer caused by
23 the challenged business practice outweighs the utility of the defendant’s conduct; and
24 (3) whether the consumer injury is substantial, not outweighed by any countervailing
25 benefits to consumers or competition, and is an injury that consumers themselves
26 could not reasonably have avoided. Defendants’ conduct is unfair under each of these
27 tests.
28
77
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 79 of 95 Page ID #:79

1 229. Plaintiff Titcher saw each of the promotions from Defendants Oseary,
2 Winkelmann, Ciccone, Hilton, Fallon, Bieber, Paltrow, Williams, Pentz, Post,
3 Broadus, Hart, Pall, Taggart, Curry, Wilburn Cash, Tesfaye, Khaled, Adidas, Soto-
4 Wright, and MoonPay concerning the BAYC ecosystem and was induced to purchase
5 and/or continue to hold Yuga securities as a result of this misleading promotion.
6 230. As a direct and proximate result of Defendants’ unlawful, unfair, and
7 deceptive practices, Plaintiff and Class members suffered damages. The Executive
8 Defendants’ activities with the Promoter Defendants and MoonPay Defendants
9 caused Plaintiff and the Class members to purchase and/or hold the BAYC NFTs
10 when they otherwise would not have done so. Indeed, had Plaintiff known that the
11 aforementioned endorsements by the Promoter Defendants were paid for by the
12 Company, as opposed to being the result of an organic and genuine interest, they
13 would not have purchased or held onto the Yuga securities that they did.
14 Furthermore, had each Promoter Defendant disclosed the omitted information,
15 Plaintiff Titcher would have seen or been aware of it as he follows the Promoter
16 Defendants’ social media accounts and the Company’s official accounts. Plaintiff
17 Titcher also stays abreast of current cryptocurrency news and would have seen any
18 disclosures had they been made by the Promoter Defendants.
19 231. Plaintiff seeks to enjoin further unlawful, unfair, and/or fraudulent acts
20 or practices by Yuga to obtain restitution and disgorgement of all monies generated
21 as a result of such practices, and for all other relief allowed under California Business
22 & Professions Code §17200.
23 SECOND CAUSE OF ACTION
24 Violation of the California Consumers Legal Remedies Act
Cal. Civil Code §1770
25 (Against All Defendants)
26 232. Plaintiffs restate and reallege all preceding allegations above as if fully
27 set forth herein.
28 233. Plaintiff Titcher is a resident of the State of California.
78
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 80 of 95 Page ID #:80

1 234. At all relevant times there was in full force and effect Cal. Civ. Code
2 §1770, which prohibits, inter alia, various methods of “unfair or deceptive acts or
3 practices undertaken by any person in a transaction intended to result or that results
4 in the sale or lease of goods or services to any consumer,” including, but not limited
5 to, “[m]isrepresenting the affiliation, connection, or association with, or certification
6 by, another” and “[r]epresenting that goods or services have sponsorship, approval,
7 characteristics, ingredients, uses, benefits, or quantities that they do not have or that
8 a person has a sponsorship, approval, status, affiliation, or connection that the person
9 does not have.” Cal. Civ. Code §1770(a)(3)-(5).
10 235. Defendants engaged in business acts and practices deemed “deceptive”
11 because of the conduct, statements, and omissions described above, including, but
12 not limited to, the following:
13 (a) knowingly and intentionally concealing the Executive Defendants’
14 specific roles and ownership interests in the Company; and
15 (b) knowingly and intentionally using and/or failing to disclose the use of
16 the Promotor Defendants to promote the financial benefits of joining a supposedly
17 exclusive club that would provide early access to digital assets poised to become
18 more valuable, all in an effort to manipulate and artificially inflate the price and
19 trading volume of the BAYC NFTs and allow Defendants to sell their BAYC NFTs
20 at those inflated prices.
21 236. Plaintiff Titcher saw each of the promotions from Defendants Oseary,
22 Winkelmann, Ciccone, Hilton, Fallon, Bieber, Paltrow, Williams, Pentz, Post,
23 Broadus, Hart, Pall, Taggart, Curry, Wilburn Cash, Tesfaye, Khaled, Adidas, Soto-
24 Wright, and MoonPay concerning the BAYC ecosystem and was induced to purchase
25 and/or continue to hold Yuga securities as a result of this misleading promotion.
26 237. As a direct and proximate result of Defendants’ unlawful, unfair, and
27 deceptive practices, Plaintiff and Class members suffered damages. Defendants’
28 activities caused Plaintiff and the Class members to purchase and/or hold the BAYC
79
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 81 of 95 Page ID #:81

1 NFTs when they otherwise would not have done so. Indeed, had Plaintiff known that
2 the aforementioned endorsements by the Promoter Defendants were paid for by the
3 Company, as opposed to being the result of an organic and genuine interest, they
4 would not have purchased or held onto the Yuga securities that they did.
5 Furthermore, had each Promoter Defendant disclosed the omitted information,
6 Plaintiff Titcher would have seen or been aware of it as they follow the Promoter
7 Defendants’ social media accounts and the Company’s official accounts. Plaintiff
8 Titcher also stay abreast of current cryptocurrency news and would have seen any
9 disclosures had they been made by the Promoter Defendants.
10 238. Plaintiffs seek to enjoin further unlawful, unfair, and/or fraudulent acts
11 or practices by Defendants, to obtain restitution and disgorgement of all monies
12 generated as a result of such practices, and for all other relief allowed under Cal. Civ.
13 Code §1780.
14 239. Plaintiffs additionally seek punitive damages under Cal. Civ. Code
15 §1780(a)(4).
16 240. Plaintiffs have complied with Cal. Civ. Code §1780(d), which requires
17 the concurrent filing of an “affidavit stating facts showing that the action has been
18 commenced in a county described in this section as a proper place for the trial of the
19 action.”
20 THIRD CAUSE OF ACTION
21 Aiding and Abetting
California Common Law
22 (Against the Promoter Defendants and MoonPay)
23 241. Plaintiffs restate and reallege all preceding allegations above as if fully
24 set forth herein.
25 242. Under California law, aiding and abetting requires not agreement, but
26 simply assistance. The elements of aiding and abetting liability have cited the
27 elements of the tort as they are set forth in the RESTATEMENT (SECOND) OF TORTS
28
80
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 82 of 95 Page ID #:82

1 §876, and have omitted any reference to an independent duty on the part of the aider
2 and abettor.
3 243. Under California law, “‘[l]iability may . . . be imposed on one who aids
4 and abets the commission of an intentional tort if the person (a) knows the other’s
5 conduct constitutes a breach of duty and gives substantial assistance or
6 encouragement to the other to so act or (b) gives substantial assistance to the other in
7 accomplishing a tortious result and the person’s own conduct, separately considered,
8 constitutes a breach of duty to the third person.’” Neilson v. Union Bank of Cal.,
9 N.A., 290 F. Supp. 2d 1101, 1118 (C.D. Cal. 2003).
10 244. “Unlike a conspirator, an aider and abettor does not ‘adopt as his or her
11 own’ the tort of the primary violator. Rather, the act of aiding and abetting is distinct
12 from the primary violation; liability attaches because the aider and abettor behaves in
13 a manner that enables the primary violator to commit the underlying tort.” Id. at
14 1134.
15 245. The Promoter Defendants have previous knowledge and experience with
16 making misleading promotional statements. Defendant Ciccone had already received
17 a cease and desist letter concerning Ciccone’s improper promotion of another NFT
18 project related to her manager, Defendant Oseary, and, as such, knew or should have
19 known that the marketing strategy employed by the Executive Defendants for the
20 BAYC NFTs was unlawful, deceitful, fraudulent, and/or violated the terms of the
21 California state statutes described in this Complaint.
22 246. By promoting the BAYC NFTs on their social media platforms and
23 through their reported conduct, the Promotor Defendants provided assistance that was
24 a substantial factor causing the BAYC NFTs price to both surge and do so long
25 enough to allow all Defendants to sell their BAYC NFTs for huge profits at the
26 expense of their followers and investors. Without the help of the Promoter
27 Defendants’ activities, the Executive Defendants would have been unable to use the
28 misleading marketing strategy devised by Oseary, and Defendants would not have
81
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 83 of 95 Page ID #:83

1 been able to commit the violations of California state consumer protection statutes
2 alleged herein.
3 247. As a direct and proximate result of the Promotor Defendants’ unlawful,
4 unfair, and deceptive practices, Plaintiffs and Class members suffered damages. The
5 Executive Defendants’ activities with the Promoter Defendants and MoonPay
6 Defendants caused Plaintiffs and the Class members to purchase and/or hold the
7 BAYC NFTs when they otherwise would not have done so.
8 248. Plaintiffs seek to enjoin further unlawful, unfair, and/or fraudulent acts
9 or practices by Yuga, to obtain monetary damages, restitution and disgorgement of
10 all monies generated as a result of such practices, and for all other relief allowed
11 under California law.
12 FOURTH CAUSE OF ACTION
13 Civil Conspiracy
California Common Law
14 (Against the Executive Defendants, Oseary, the Promoter Defendants, and the
MoonPay Defendants)
15
249. Plaintiffs restate and reallege all preceding allegations above as if fully
16
set forth herein.
17
250. Beginning in October 2021, and continuously thereafter up to and
18
including the date of the filing of the Complaint, the Executive Defendants and
19
Oseary did engage in the formation and operation of a conspiracy with the Promotor
20
Defendants and MoonPay to misleadingly promote BAYC NFTs to retail investors
21
to artificially inflate the price so that the Executive Defendants could sell the BAYC
22
NFTs at substantial profits.
23
251. As alleged above, each Defendant acted in furtherance of the conspiracy
24
by, among other things, concealing the identity and ownership interests of, and
25
association with, the Yuga founders (i.e., the Executive Defendants) and falsely
26
promoting the BAYC NFTs as sound investments with significant growth potential.
27
28
82
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 84 of 95 Page ID #:84

1 252. As a proximate result of said conspiracy, as described in the foregoing


2 paragraphs, Plaintiffs suffered, continue to suffer, and will suffer in the future, the
3 damages alleged herein.
4 253. For Defendants’ conduct in the alleged conspiracy, Plaintiffs seek
5 compensatory damages against all Defendants, and each of them, jointly and
6 severely, in an as-yet undetermined amount; punitive damages, injunctive relief
7 enjoining Defendants from continuing to falsely and misleadingly promote the
8 BAYC NFTs; and divestiture of all money wrongfully obtained, whether directly or
9 indirectly, as part of the alleged conspiracy.
10 254. In furtherance of this conspiracy, the Executive Defendants hired Oseary
11 to recruit the Promotor Defendants and others to promote the BAYC NFT collection
12 specifically and the overall Bored Ape brand generally. Neither Oseary nor the
13 Promoter Defendants disclosed their financial ties to and interests in the Company
14 and/or MoonPay. The purpose of these overt acts was to enable the Executive
15 Defendants to compensate the Promoter Defendants without having to disclose that
16 the Promoter Defendants’ promotions were bought and paid for (instead of genuine
17 expressions of interest).
18 255. Defendants’ actions falsely promoting the BAYC NFTs enriched
19 themselves to the detriment of Plaintiffs and Class members. While the Executive
20 Defendants made hundreds of millions of dollars, investors were left with NFTs
21 worth a fraction of their artificially inflated value.
22 256. As a direct and proximate result of Defendants’ actions, Plaintiffs and
23 Class members were damaged in the amount of the difference between the fair market
24 price of their BAYC NFTs but for the Defendants’ actions and the price they paid for
25 their BAYC NFTs.
26 FIFTH CAUSE OF ACTION
27 Violations of §10(b) of the Exchange Act
and Rule 10b-5
28 (Against All Defendants)

83
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 85 of 95 Page ID #:85

1 257. Plaintiffs restate and reallege all preceding allegations above as if fully
2 set forth herein.
3 258. This Count is asserted against Defendants and is based upon §10(b) of
4 the Securities Exchange Act of 1934 (“Exchange Act”), 15 U.S.C. §78j(b), and Rule
5 10b-5 promulgated thereunder by the SEC.
6 259. During the Class Period, Defendants engaged in a plan, scheme,
7 conspiracy, and course of conduct pursuant to which they knowingly or recklessly
8 engaged in acts, transactions, practices, and courses of business that operated as a
9 fraud and deceit upon Plaintiffs and the other members of the Class; made various
10 untrue statements of material facts and omitted to state material facts necessary in
11 order to make the statements made, in light of the circumstances under which they
12 were made, not misleading; and employed devices, schemes, and artifices to defraud
13 in connection with the purchase and sale of securities. Such scheme was intended to,
14 and, throughout the Class Period, did: (i) deceive the investing public, including
15 Plaintiffs and other Class members, as alleged herein; (ii) artificially inflate and
16 maintain the market price of Yuga securities; and (iii) cause Plaintiffs and other
17 members of the Class to purchase or otherwise acquire Yuga securities at artificially
18 inflated prices. In furtherance of this unlawful scheme, plan, and course of conduct,
19 Defendants, and each of them, took the actions set forth herein.
20 260. Pursuant to the above plan, scheme, conspiracy, and course of conduct,
21 each of the Defendants participated directly or indirectly in the preparation and/or
22 issuance of the SEC filings, press releases, and other statements and documents, as
23 described above, including statements made to the media, that were designed to
24 influence the market for Yuga securities. Such reports, filings, releases, and
25 statements were materially false and misleading in that they failed to disclose material
26 adverse information and misrepresented the truth about Yuga’s business and
27 operations.
28
84
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 86 of 95 Page ID #:86

1 261. By virtue of their positions at the Company, Ape Foundation, and Ape
2 DAO Board, Defendants had actual knowledge of the materially false and misleading
3 statements and material omissions alleged herein and intended thereby to deceive
4 Plaintiffs and the other members of the Class, or, in the alternative, Defendants acted
5 with reckless disregard for the truth in that they failed or refused to ascertain and
6 disclose such facts as would reveal the materially false and misleading nature of the
7 statements made, although such facts were readily available to Defendants. Said acts
8 and omissions of Defendants were committed willfully or with reckless disregard for
9 the truth. In addition, each Defendant knew or recklessly disregarded that material
10 facts were being misrepresented or omitted, as described above.
11 262. Information showing that Defendants acted knowingly or with reckless
12 disregard for the truth is peculiarly within Defendants’ knowledge and control. As
13 senior executives and directors of Yuga/Ape Foundation, the Executive Defendants
14 and Ape DAO Board Defendants had knowledge of the details of Yuga’s internal
15 affairs.
16 263. The Individual Defendants are liable both directly and indirectly for the
17 wrongs complained of herein. Because of their positions of control and authority, the
18 Individual Defendants were able to, and did, directly or indirectly, control the content
19 of the statements of Yuga. The Individual Defendants had duties to disseminate
20 timely, accurate, truthful, and complete information with respect to Yuga’s
21 businesses, operations, future financial condition, and future prospects. As a result
22 of the dissemination of the aforementioned false and misleading reports, releases, and
23 public statements, the market price of Yuga securities was artificially inflated
24 throughout the Class Period. In ignorance of the adverse facts concerning Yuga’s
25 business and financial condition, which were concealed by Defendants, Plaintiffs and
26 other members of the Class purchased or otherwise acquired Yuga securities at
27 artificially inflated prices and relied upon the price of the securities, the integrity of
28
85
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 87 of 95 Page ID #:87

1 the market for the securities, and/or statements disseminated by Defendants, and were
2 damaged thereby.
3 264. During the Class Period, Yuga securities were traded on an active and
4 efficient market. Plaintiffs and the other members of the Class, relying on the
5 materially false and misleading statements described herein, which the Defendants
6 made, issued, or caused to be disseminated, or relying upon the integrity of the
7 market, purchased or otherwise acquired Yuga securities at prices artificially inflated
8 by Defendants’ wrongful conduct. Had Plaintiffs and the other members of the Class
9 known the truth, they would not have purchased or otherwise acquired said securities,
10 or would not have purchased or otherwise acquired them at the inflated prices that
11 were paid. At the time of the purchases and/or acquisitions by Plaintiffs and the
12 Class, the true value of Yuga securities was substantially lower than the prices paid
13 by Plaintiffs and the other members of the Class. The market price of Yuga securities
14 declined sharply upon public disclosure of the facts alleged herein to the injury of
15 Plaintiffs and Class members.
16 265. By reason of the conduct alleged herein, Defendants have knowingly or
17 recklessly, directly or indirectly, violated §10(b) of the Exchange Act and Rule 10b-
18 5 promulgated thereunder.
19 266. As a direct and proximate result of Defendants’ wrongful conduct,
20 Plaintiffs and the other members of the Class suffered damages in connection with
21 their respective purchases, acquisitions, and sales of the Company’s securities during
22 the Class Period, upon the disclosure that the Company had been disseminating false
23 and/or misleading statements to the investing public.
24 SIXTH CAUSE OF ACTION
25 Violations of §20(a) of the Exchange Act
(Against the Executive Defendants, the Ape DAO Board Defendants, and
26 Individual Defendant Oseary)
27 267. Plaintiffs restate and reallege all preceding allegations above as if fully
28 set forth herein.
86
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 88 of 95 Page ID #:88

1 268. During the Class Period, the Executive Defendants, the Ape DAO Board
2 Defendants, and Individual Defendant Oseary participated in the operation and
3 management of Yuga and conducted and participated, directly and indirectly, in the
4 conduct of Yuga’s business affairs. Because of their senior positions, the Individual
5 Defendants knew the adverse non-public information about Yuga’s promotional
6 efforts and future business prospects.
7 269. As officers and/or directors of Yuga and/or the Ape Foundation, the
8 Executive Defendants, the Ape DAO Board Defendants, and Individual Defendant
9 Oseary had duties to disseminate accurate and truthful information, with respect to
10 Yuga’s business practices, and promptly correct any public statements issued by or
11 on behalf of Yuga that had become materially false or misleading.
12 270. Because of their positions of control and authority as senior directors or
13 officers and executive team members, the Individual Defendants were able to, and
14 did, control the contents of the various reports, press releases, and public filings that
15 Yuga disseminated in the marketplace during the Class Period concerning the
16 Company’s business, operational, and accounting policies. Throughout the Class
17 Period, the Individual Defendants exercised their power and authority to cause Yuga
18 to engage in the wrongful acts complained of herein. The Executive Defendants, the
19 Ape DAO Board Defendants, and Individual Defendant Oseary, therefore, were
20 “controlling persons” of Yuga within the meaning of §20(a) of the Exchange Act. In
21 this capacity, the Executive Defendants, the Ape DAO Board Defendants, and
22 Individual Defendant Oseary participated in the unlawful conduct alleged herein that
23 artificially inflated the market price of Yuga securities.
24 271. The Executive Defendants, the Ape DAO Board Defendants, and
25 Individual Defendant Oseary, therefore, acted as controlling persons of Yuga. By
26 reason of their senior management positions and/or being directors of Yuga, they had
27 the power to direct the actions of, and exercised the same to cause Yuga to engage in
28 the unlawful acts and conduct complained of herein. The Executive Defendants, the
87
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 89 of 95 Page ID #:89

1 Ape DAO Board Defendants, and Individual Defendant Oseary exercised control
2 over the general operations of Yuga and possessed the power to control the specific
3 activities that comprise the primary violations about which Plaintiffs and the other
4 members of the Class complain.
5 272. By reason of the above conduct, the Executive Defendants, the Ape
6 DAO Board Defendants, and Individual Defendant Oseary are liable pursuant to
7 §20(a) of the Exchange Act for the violations committed by Yuga.
8 SEVENTH CAUSE OF ACTION
9 Violations of § 10(b) of the Exchange Act and
Rule 10b-5(b) Promulgated Thereunder
10 (Against the Executive Defendants, the Ape DAO Board Defendants, and
Individual Defendant Oseary)
11
273. Plaintiffs restate and reallege all preceding allegations above as if fully
12
set forth herein.
13
274. For the purposes of this cause of action, the Executive Defendants, the
14
Ape DAO Board Defendants, and Individual Defendant Oseary are collectively
15
referred to as the “Scheme Defendants.”
16
275. During the Class Period, the Scheme Defendants carried out a plan,
17
scheme and course of conduct which was intended to, and throughout the Class
18
Period, did: (1) deceive the investing public, including Plaintiffs and other Class
19
members, as alleged herein; and (2) cause Plaintiffs and other members of the Class
20
to purchase Yuga securities at artificially inflated and distorted prices; and (3) cause
21
Plaintiffs and other members of the Class not to sell Yuga securities until the Scheme
22
Defendants and other Company insiders could sell Yuga securities at artificially
23
inflated and distorted prices. In furtherance of this unlawful scheme, plan and course
24
of conduct, the Scheme Defendants made the false statements alleged herein.
25
276. The Scheme Defendants, directly and indirectly, by the use, means, or
26
instrumentalities of interstate commerce and/or of the mails, engaged and participated
27
in a continuous course of conduct to misrepresent the true nature of the promotional
28
88
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 90 of 95 Page ID #:90

1 activities of the Company and conceal adverse material information about the
2 business, operations and future prospects of Yuga as specified herein.
3 277. The Scheme Defendants employed devices, schemes and artifices to
4 defraud, while in possession of material adverse non-public information and engaged
5 in acts, practices, and a course of conduct as alleged herein in an effort to assure
6 investors of Yuga’s revenue, income, value and performance and continued
7 substantial growth, which included the making of, or the participation in the making
8 of, untrue statements of material facts and omitting to state material facts necessary
9 in order to make the statements made about Yuga and its business operations and
10 financial condition in light of the circumstances under which they were made, not
11 misleading, as set forth more particularly herein, and engaged in transactions,
12 practices and a course of business that operated as a fraud and deceit upon the
13 purchasers Yuga securities during the Class Period.
14 278. The Scheme Defendants had actual knowledge of the misrepresentations
15 and omissions of material facts set forth herein, or acted with reckless disregard for
16 the truth in that they failed to ascertain and to disclose such facts, even though such
17 facts were available to them. The material misrepresentations and/or omissions made
18 by the Scheme Defendants were done knowingly or recklessly and for the purpose
19 and effect of concealing Yuga’s financial condition from the investing public and
20 supporting the artificially inflated price of its securities. As demonstrated by the false
21 and misleading statements during the Class Period of the Scheme Defendants, if they
22 did not have actual knowledge of the misrepresentations and omissions alleged, were
23 highly reckless in failing to obtain such knowledge by failing to take steps necessary
24 to discover whether those statements were false or misleading.
25 279. As a result of the dissemination of the materially false and misleading
26 information and failure to disclose material facts, as set forth above, the market price
27 for Yuga securities was artificially inflated during the Class Period.
28
89
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 91 of 95 Page ID #:91

1 280. In ignorance of the fact that market prices of Yuga securities were
2 artificially inflated or distorted, and relying directly or indirectly on the false and
3 misleading statements made by Defendants, or upon the integrity of the market in
4 which the Yuga securities trade, and/or on the absence of material adverse
5 information that was known to or recklessly disregarded by the Scheme Defendants
6 but not disclosed in public statements by Defendants during the Class Period,
7 Plaintiffs and the other members of the Class acquired Yuga securities during the
8 Class Period at artificially high prices and were damaged thereby.
9 281. At the time of said misrepresentations and omissions, Plaintiffs and
10 other members of the Class were ignorant of their falsity, and believed them to be
11 true. Had Plaintiffs and the other members of the Class and the marketplace known
12 the truth regarding Yuga’s promotional activities Plaintiffs and other members of the
13 Class would not have purchased or otherwise acquired Yuga’s securities, or, if they
14 had acquired such securities during the Class Period, they would not have done so at
15 the artificially inflated prices or distorted prices at which they did.
16 282. By virtue of the foregoing, the Scheme Defendants have violated §10(b)
17 of the Exchange Act, and Rule 10b-5 promulgated thereunder.
18 283. As a direct and proximate result of the wrongful conduct of the Scheme
19 Defendants, Plaintiffs and the other members of the Class suffered damages in
20 connection with their respective purchases and sales of the Company’s securities
21 during the Class Period.
22 284. This action was filed within two years of discovery of the fraud and
23 within five years of Plaintiffs’ purchases of securities giving rise to the cause of
24 action.
25 EIGHTH CAUSE OF ACTION
26 Unregistered Offering and Sale of Securities in
Violation of §§5 and 12(a)(1) of the Securities Act
27 (Against All Defendants)
28
90
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 92 of 95 Page ID #:92

1 285. Plaintiffs restate and reallege all preceding allegations above as if fully
2 set forth herein.
3 286. Defendants, and each of them, by engaging in the conduct described
4 above, directly or indirectly, made use of means or instruments of transportation or
5 communication in interstate commerce or of the mails, to offer to sell or to sell
6 securities, or to carry or cause such securities to be carried through the mails or in
7 interstate commerce for the purpose of sale or for delivery after sale.
8 287. The Yuga Financial Products are securities within the meaning of
9 §2(a)(1) of the Securities Act of 1933 (“Securities Act”), 15 U.S.C. §77b(a)(1).
10 288. Plaintiffs and members of the Class purchased Yuga securities.
11 289. No registration statements have been filed with the SEC or have been in
12 effect with respect to any of the offerings alleged herein. No exemption to the
13 registration requirement applies.
14 290. SEC Rule 159A provides that, for purposes of §12(a)(2), an “issuer” in
15 “a primary offering of securities” shall be considered a statutory seller. 17 C.F.R.
16 §230.159A(a). The Securities Act, in turn, defines “issuer” to include every person
17 who issues or proposes to issue any security. 15 U.S.C. §77b(a)(4). Yuga is an issuer
18 of Yuga securities.
19 291. The U.S. Supreme Court has held that statutory sellers under §12(a)(1)
20 also include “the buyer's immediate seller” and any person who actively solicited the
21 sale of the securities to plaintiff and did so for financial gain. See Pinter v. Dahl, 486
22 U.S. 622, 644 n.21 & 647 (1988). That is, §12(a)(1) liability extends to sellers who
23 actively solicit the sale of securities with a motivation to serve their own financial
24 interest or those of the securities owner. Id. at 647. The Company, the Executive
25 Defendants, the Ape DAO Board Defendants, and the Promoter Defendants are all
26 statutory sellers.
27 292. By reason of the foregoing, each of the Defendants have violated §§5(a),
28 5(c), and 12(a) of the Securities Act, 15 U.S.C. §§77e(a), 77e(c), and 77l(a).
91
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 93 of 95 Page ID #:93

1 293. As a direct and proximate result of Defendants’ unregistered sale of


2 securities, Plaintiffs and the Class have suffered damages in connection with their
3 Yuga securities purchases.
4 NINTH CAUSE OF ACTION
5 Violation of §15 of the Securities Act
(Against the Company, the Executive Defendants, Ape DAO Board
6 Defendants, and Individual Defendant Oseary)
7 294. Plaintiffs restate and reallege all preceding allegations above as if fully
8 set forth herein.
9 295. This cause of action is asserted against the Company, the Executive
10 Defendants, Ape DAO Board Defendants, and Individual Defendant Oseary
11 (collectively, the “Control Person Defendants”) under Section 15 of the Securities
12 Act, 15 U.S.C. §77o.
13 296. The Control Person Defendants, by virtue of their offices, ownership,
14 agency, agreements or understandings, and specific acts were, at the time of the
15 wrongs alleged herein, and as set forth herein, controlling persons within the meaning
16 of Section 15 of the Securities Act. The Control Person Defendants, and each of
17 them, had the power and influence and exercised the same to cause the unlawful offer
18 and sale of Yuga securities as described herein.
19 297. The Control Person Defendants, separately or together, possess, directly
20 or indirectly, the power to direct or cause the direction of the management and
21 policies of Yuga, the Ape Foundation, and Ape DAO, through ownership of voting
22 securities, by contract, subscription agreement, or otherwise.
23 298. The Control Person Defendants also have the power to direct or cause
24 the direction of the management and policies of Yuga, the Ape Foundation, and Ape
25 DAO.
26 299. The Control Person Defendants, separately or together, have sufficient
27 influence to have caused Yuga securities and/or the Company to submit a registration
28 statement.
92
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 94 of 95 Page ID #:94

1 300. The Control Person Defendants, separately or together, jointly


2 participated in Yuga’s failure to register the Yuga securities.
3 301. By virtue of the conduct alleged herein, the Control Person Defendants
4 are liable for the wrongful conduct complained of herein and are liable to Plaintiffs
5 and the Class for rescission and/or damages suffered.
6 TENTH CAUSE OF ACTION
7 Unjust Enrichment/Restitution
(California Common Law, in the Alternative)
8 (Against the Company and the Executive Defendants)
9 302. Plaintiffs restate and reallege all preceding allegations above as if fully
10 set forth herein.
11 303. Plaintiffs and Class members conferred a monetary benefit on
12 Defendants by raising the price and trading volume of the BAYC NFTs, which
13 allowed the Executive Defendants to sell their BAYC NFTs to Plaintiffs and Class
14 members at inappropriately and artificially inflated prices.
15 304. Executive Defendants received a financial benefit from the sale of their
16 BAYC NFTs at inflated prices and are in possession of this monetary value that was
17 intended to be used for the benefit of, and rightfully belongs to, Plaintiffs and
18 members of the Class.
19 305. Plaintiffs and Class members seek restitution in the form of the
20 monetary value of the difference between the purchase price of BAYC NFTs and the
21 price those BAYC NFTs sold for.
22 VIII. PRAYER FOR RELIEF
23 WHEREFORE, Plaintiffs, individually and on behalf of all others similarly
24 situated, respectfully request that this Court:
25 A. Determine that the claims alleged herein may be maintained as a class
26 action under Rule 23 of the Federal Rules of Civil Procedure, and issue an order
27 certifying the Class defined above;
28
93
CLASS ACTION COMPLAINT
Case 2:22-cv-08909 Document 1 Filed 12/08/22 Page 95 of 95 Page ID #:95

1 B. Appoint Plaintiffs as representatives of the Class and their counsel as


2 Class counsel;
3 C. Award all actual, general, special, incidental, statutory, punitive, and
4 consequential damages and restitution to which Plaintiffs and Class members are
5 entitled;
6 D. Award post-judgment interest on such monetary relief;
7 E. Grant appropriate injunctive and/or declaratory relief;
8 F. Award reasonable attorneys’ fees and costs; and
9 G. Grant such further relief that this Court deems appropriate.
10 IX. JURY DEMAND
11 Plaintiffs, individually and on behalf of the putative Class, demands a trial by
12 jury on all issues so triable.
13 DATED: December 8, 2022 /s/ John T. Jasnoch
John T. Jasnoch
14 SCOTT+SCOTT ATTORNEYS AT LAW LLP
600 W. Broadway, Suite 3300
15 San Diego, CA 92101
Tel.: 619-233-4565
16 jjasnoch@scott-scott.com
17 Aaron M. Zigler
Nidya Gutierrez
18 ZIGLER LAW GROUP, LLC
308 S. Jefferson Street | Suite 333
19 Chicago, IL 60661
Tel: 312-673-8427
20 aaron@ziglerlawgroup.com
nidya.gutierrez@ziglerlawgroup.com
21
Counsel for Plaintiffs and
22
the Proposed Class
23
24
25
26
27
28
94
CLASS ACTION COMPLAINT

You might also like