Logan Paul sues co-defendants in CryptoZoo class action lawsuit

Update:

• Logan Paul, an Internet personality, boxer and YouTuber, filed a lawsuit against two of  his codefendants in a class action lawsuit involving the failure of their CryptoZoo gaming project. 
• Paul argues the CryptoZoo failures were not his fault and codefendants Eduardo Ibanez and Jake Greenbaum are solely to blame.
• Paul claims Ibanez and Greenbaum, the latter of which goes by the moniker CryptoKing, misrepresented their abilities and sabotaged the project for their own financial gain. 
• An individual filed a class action lawsuit against Paul, Ibanez, Greenbaum and several others, arguing they abandoned the project and made off with the funds, otherwise known as a cryptocurrency rug pull. 
• Paul announced CryptoZoo in 2021; however, the project never materialized. 

CryptoZoo fraud class action overview: 

• Who: A police officer who bought digital currency from CryptoZoo is suing the company and its leaders.
• Why: The plaintiff says he and thousands of others bought tokens to use in a CryptoZoo game that never existed, in an illegal “rug pull” scheme orchestrated by the company’s executives.
• Where: The CryptoZoo fraud class action was filed in a Texas federal court.

(Feb. 07, 2023)

A Texas police officer who bought digital currency from CryptoZoo is suing the company and its executives, saying they ran an illegal “rug pull” scheme where they baited thousands of customers to buy tokens for a game they were never able to play.

Plaintiff Don Holland filed the class action lawsuit against CryptoZoo Inc., Logan Paul, Danielle Strobel, Jeffrey Levin, Eddie Ibanez, Jake Greenbaum—also known as Crypto King— and Ben Roth Feb. 2 in a Texas federal court, alleging violations of state and federal consumer laws.

CryptoZoo is a Delaware corporation that sold digital currency called Zoo Tokens, which it said could be used to purchase CryptoZoo Non-Fungible Tokens (CZ NFTs) for use in its online game CryptoZoo. NFTs are a form of digital assets that can be purchased, sold, and transferred on the Binance blockchain.

According to Holland’s lawsuit, CryptoZoo marketed its NFTs to consumers unfamiliar with digital currency products, leading to tens of thousands of people buying them to use in the CryptoZoo “game.”

“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,” Holland alleges.

CryptoZoo did a ‘rug pull’ on customers, lawsuit alleges

CryptoZoo and its executives executed a “rug pull” on unwitting consumers; a colloquial term used to describe a scheme in which an NFT developer solicits funds from prospective NFT purchasers promising them certain benefits, the lawsuit states.

“Once the purchasers’ funds are used to purchase the NFTs, the developers abruptly abandon the project and fail to deliver the promised benefits all while fraudulently retaining the purchasers’ funds.”

As part of the scheme, the company allegedly told purchasers they would receive benefits, including rewards, exclusive access to other cryptocurrency assets, and the support of an online ecosystem to use and market CZ NFTs. 

“In reality, soon after completing the sale of all their CZ NFTs, Defendants, together with others,transferred millions of dollars’ worth of purchasers’ cryptocurrency to, among other places, wallets controlled by Defendants.” 

The promised CryptoZoo “game” was never delivered to consumers, the lawsuit alleges. 

As a result, Holland seeks to represent anyone who purchased Zoo tokens and/or CryptoZoo NFTs while in Texas. He is suing for fraud, breach of contract, unjust enrichment and negligence and seeks damages, fees and costs. 

Meanwhile, in January, Genesis Global Capital and Gemini Trust Co. were hit with a class action lawsuit alleging they violated federal securities law by engaging in an unregistered offer and sale of securities. 

What do you think of the claims against CryptoZoo? Let us know in the comments! 

The plaintiff is represented by Ellzey & Associates PLLC and Attorney Tom & Associates. 

The CryptoZoo class action lawsuit is Don Holland et al., v. CryptoZoo Inc., Case No. 1:23-cv-00110 in the U.S. District Court for the Western District of Texas.

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