Bored app creators 'Era Labs' hit by class-action lawsuit alleging inflated prices
Categories: Crypto News US
Bored app creators 'Era Labs' hit by class-action lawsuit alleging inflated prices
Yuga Labs, the creators of Bored app Yachts Club NFT Collection and Apcoin, is facing a class-action lawsuit brought by international law firm Scott + Scott for allegedly selling Bored app NFT and Apcoin as securities with guaranteed returns. Brought as a boost, but what really fell in value over the past three months.
While no official complaint has been filed in a US federal court, Scott+Scott is currently seeking impacted investors who suffered losses on BAYC NFTs and ApeCoin between April and June this year.The key to the success of this lawsuit is that Yug Labs would have failed to make the required disclosure and registration obligations that come with the securities offering in the case that the court decides whether NFTs are securities.
So far, the Securities and Exchange Commission (SEC) has refrained from labeling any NFTs as a security because it would bring the broader art market under its purview. The legal threat to BAYC hit Era Labs with repeated blows could not have come at a worse time, given its recent troubles.
In April, BAYC's Instagram account was compromised for US$2.8 million in an NFT phishing scam. In the following month, BAYC committed what could be described as a "minting fail", where over US$157 million in ETH was burned as part of the launch of its "otherside" metaverse. Then in June, Era Labs confirmed that its Discord servers had been "briefly exploited", leading to the loss of over 200 ETH (approximately US$357,000) worth of NFTs.