- The defendants claim the project “executed a ‘rug pull,’” utilizing Paul’s internet following.
- CryptoZoo was announced with the promise of “an autonomous ecosystem.”
In a new class action lawsuit, Logan Paul and the NFT project CryptoZoo are accused of rug pull. In September 2021, the NFT-based game CryptoZoo was announced. With the promise of “an autonomous ecosystem” that would allow virtual ZooKeepers to purchase, sell, and trade exotic animals on the blockchain, hatching them from eggs at the moment of purchase.
Court documents from the Western District of Texas claim that the defendants “executed a rug pull.” Utilizing Paul’s internet following to advertise CryptoZoo’s goods “to consumers unfamiliar with digital currency products, leading to tens of thousands of people” buying these items.
Multiple Allegations Filed
The term rug pull is often used to refer to the situation in which a crypto developer solicits funding for a new token or NFT line from investors by making false promises to those investors about the project’s future success.
The defendants are accused of promising buyers of CryptoZoo NFTs an online ecosystem to help them promote and sell the tokens, as well as incentives including cash back and early access to “other cryptocurrency assets at a later date.”
The complaint continued by stating:
“Unbeknownst to the customers, the game did not work or never existed, and Defendants manipulated the digital currency market for Zoo Tokens to their advantage.”
Furthermore, it was claimed in the petition that the defendants moved the proceeds from the sale of their NFTs to wallets under their control shortly after the sales were finalized. The complaint is filed at a time when Paul has started to accept some responsibility for compensating investors who lost money on CryptoZoo.
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