YouTube star Logan Paul is facing a class-action lawsuit regarding his CryptoZoo NFT project. The internet personality is accused of committing a rug pull.
A rug pull is a term used within the world of cryptocurrency to describe a type of scam. The team or individual behind a crypto project will inject money into a token to make it seem more lucrative than it truly is. Once people have then invested their own money in the project the creators pull all the funds.
Originally announced in September 2021, CryptoZoo was presented as an NFT-based game with an autonomous ecosystem. This would allow users to become virtual ZooKeepers by buying, selling and trading exotic animals which could be hatched from eggs.
However, the project has now come under fire as Paul and associates of the project are being accused of creating a fraudulent venture. The lawsuit alleges they could be responsible for taking millions of dollars worth of users’ cryptocurrency.
According to the filing itself, “defendants promoted CrytoZoo’s products using Mr.Paul’s online platforms to consumers unfamiliar with digital currency products. Leading to tens of thousands of people purchasing said products. Unbeknownst to the customers, the game did not work or never existed, and the Defendants manipulated the digital currency market for Zoo tokens to their advantage.”
YouTuber and crypto journalist Coffezilla also put together videos in an attempt to expose the CryptoZoo project. Real name Stephen Findeisen, has made somewhat of a name for himself as a crypto sleuth and also played a hand in exposing Sam Bankman-Fried and the collapse of FTX. The videos targeting Paul promoted a response and the pair went back and forth exchanging words.
However, at the start of the year, Paul posted an apology to Coffeezilla and stated that “I’m grateful he brought this to light. I will be taking accountability.” Paul has since gone on to announce a plan for the project to restore user faith and has shared details of a $1.3 million rewards program for disappointed players. Paul’s legal team has also spoken with BuzzFeed stating that the suit is “A careless civil action, which is dramatically flawed and filed with the intention of generating headlines, not merit.”