Logan Paul, Founders Sued For CryptoZoo Scheme
A police officer representing a class action is filing a lawsuit in the Texas Western District Court against CryptoZoo founder Logan Paul and his cohorts for eight counts of fraud, contract breaches, and unjust enrichment, among others.
Don Holland, who is one of those who purchased the ecosystem digital asset ZOO token and saw his investment “rug pulled” by the defendants’ manipulation of the market, is suing Paul and other CryptoZoo founders: project manager Eduardo Ibanez, Jake Greenbaum aka Crypto King, Paul’s manager Jeffrey Levin, and Paul’s assistant Danielle Strobel. The suit also named CryptoZoo community manager Ophir Bentov aka Ben Roth as defendant.
“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 suit read.
The lawsuit stems from the debacle that is Paul’s NFT gamified platform CryptoZoo that allegedly never materialized. It was designed to allow users to breed, collect, and trade exotic animal hybrids on the blockchain. Each animal was supposed to be treated as an NFT and the game’s ecosystem was to use CryptoZoo-exclusive tokens, ZOO.
The once-promising idea, which had started getting investment from retail crypto through its ecosystem’s digital asset, ended with a game that has never been played, losing actual money in the process for investors.
YouTube channel Coffeezilla, run by Stephen Findeisen, released a three-part video series investigating on the crypto game platform and how it never got to be played the way Paul marketed it to be. The celebrity influencer has also explained his side, essentially claiming that he was caught in between bad actors that led to the project’s fall and was last revealed to be having a dialogue with Coffeezilla on how they can make CryptoZoo customers whole.
The similar findings Coffeezilla exposed on his online series were the reasons for Holland and his class to file the suit, ranging from defrauding CryptoZoo investors to manipulating the token market for the founders’ gain.
In 2021, Holland learned about a new NFT project with Paul via his kid. Paul then touted CryptoZoo as a “game that makes you money,” with a “massive team” behind it and “like a million” dollars invested by Paul. When the firm released the ZOO tokens in August 2021, Holland invested an initial $1,000 and spent an additional approximately $2,000 after the project launch date.
“Once he saw Logan Paul announce another NFT project and started ignoring ZOO, he realized his money was likely lost. CryptoZoo was never released as advertised and the value of the Zoo Tokens and CZ NFTs plummeted,” the suit wrote.
Holland further alleges that because the defendants manipulated the market for ZOO by buying and selling them in bulk, the value continued to fall. They essentially led him to lose the bulk of the assets he invested.
“Defendants’ scheme caused damages to 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,” he added.
The proposed class action estimates “there is approximately 20,000 victims and on information and belief there are thousands in Texas” according to data.
The plaintiffs are represented by Ellzey & Associates, and Attorney Tom & Associates. On top of awarding actual and compensatory damages, they also demand that the court may find that doctrine of unjust enrichment applies in this case and order the defendants to pay the plaintiffs “all sums received by Defendants flowing from their illegal and unconscionable activities.”
The Texas lawsuit seems fitting for Paul who had just participated days ago in wrestling promotion WWE’s pay-per-view event Royal Rumble which was held live in Alamodome in San Antonio, Texas.
Information for this briefing was found via the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
