Social Media Influencer Logan Paul Hit with Lawsuit for Alleged CryptoZoo ‘Rug Pull’
On Thursday, February 2, 2023, a class-action lawsuit has been filed in the District Court of the Western District of Texas against social media influencer Logan Paul, along with the executives of CryptoZoo (CZ), alleging that they engaged in a “rug pull”
CryptoZoo, which was announced in September 2021, is an autonomous ecosystem that allows ZooKeepers to buy, sell, and trade exotic animals and hybrids using the CryptoZoo Non-Fungible Tokens (CZ NFT).
Plaintiff Don Holland, a police officer residing in Round Rock, Texas, alleged that Paul and his associates promised CZ NFT buyers that they will receive exclusive access to crypto assets in addition to other privileges, but ultimately abandoned the project and kept the funds.
“Defendants promoted CryptoZoo Inc.’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 Defendants manipulated the digital currency market for Zoo Tokens to their advantage.”
According to the lawsuit, the defendants’ scheme caused damages to the plaintiff and other consumers.
“Defendants knew consumers like Plaintiff would be convinced to purchase their products by Defendants’ false representations of profit and a functional game. On information and belief, Defendants made the business decision to forego an expensive and time-consuming process to create a functional CryptoZoo game or support it, and instead deliberately undertook a scheme to defraud Plaintiff and other consumers.”
The lawsuit also alleged that Paul and his colleagues participated in undue enrichment, a conspiracy to commit fraud, and deceptive trade practices in violation of the Texas Deceptive Trade Practices Act.
“This action seeks redress from Defendants for their fraudulently promoting and selling products that did not function as advertised, failing to support the CryptoZoo project, and manipulating the digital currency. Defendants operated this fraudulent venture to exploit and steal from Plaintiff and other customers who trusted Mr. Paul’s false representations. As a result, Defendants defrauded Plaintiff and thousands of other consumers, and unjustly enriched themselves by profiting off Plaintiff and others without delivering on their promises.”
The plaintiff is seeking punitive damages in an amount to be proven at trial.
A copy of the filing can be found here.
