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Logan Paul and CryptoZoo Facing Class Action Lawsuit Over Alleged ‘Rug Pull’ Scandal
YouTuber Logan Paul and the executives of CryptoZoo have been hit with a class action lawsuit for allegedly participating in a fraudulent scheme that involved the sale of NFTs.
The lawsuit, filed by Don Holland and supported by Ellzey & Associates and Attorney Tom and Associates, claims that CryptoZoo team and Paul promised NFT collectors numerous future benefits, including cryptocurrency assets, rewards, and an ecosystem to market the NFTs.
We have officially filed a class action lawsuit in the Western District of Texas against Logan Paul et al. for the CryptoZoo fiasco. (This is in addition to the numerous cases heading to arbitration on the matter.) pic.twitter.com/BIC5v63TGZ
— AttorneyTom (@attorney_tom) February 2, 2023
However, soon after the sale of the NFTs was completed, the defendants are accused of transferring millions of dollars worth of cryptocurrency to wallets that they controlled. The lawsuit alleges that Paul & the CryptoZoo team knew that their game was non-functional and had an obligation to disclose this to purchasers, but failed to do so.
The plaintiffs claim that the defendants engaged in fraudulent behavior, broke express contract agreements, unfairly benefited, violated Delaware trade laws, acted negligently, lied fraudulently, and conspired to commit fraud.
Earlier this year, a YouTube journalist (Cryptozilla) claimed that the game was not built with the promised $1 million and was merely a copy of another game. The journalist also accused Paul of indulging in fraudulent activities and stated that people lost millions as they were buying promises and marketing rather than a functional game.
The new lawsuit involves 20,000 NFT holders from CryptoZoo. The plaintiffs want not just compensation but also extra penalties. It’s still unknown what will happen and what effect it will have on Logan Paul and CryptoZoo.