In recent months, the rise of digital collectibles known as Non-Fungible Tokens (NFTs) has taken off, with celebrities and influencers being among those eager to cash in. But in some cases these “shills” have gone too far and ended up facing legal action.
In the case of the NFT platform Bored Ape, various high-profile celebrities including Doja Cat, Tyga, and Jack Dorsey have been dragged into court over allegations that they illegally promoted the platform and its premium tokens.
The lawsuit filed by California-based lawyer Barbara D. Lister-Sink alleges that Bored Ape ran a “Ponzi-like scheme” based on the sale of premium tokens, with celebrities like Doja Cat and Tyga allegedly used to lure unwitting investors to the platform. The lawsuit further alleges that Doja Cat used her social media following to push investors to purchase Bored Ape tokens, and alleges that Jack Dorsey “recommended” the Bored Ape platform in a series of tweets that were subsequently retweeted by Doja Cat and Tyga.
The lawsuit is seeking at least $3 million in damages, alleging that the trio of celebrities were compensated for their shilling and thus profited off the investments of many “unsophisticated investors”.
As the NFT market continues to explode in popularity, more and more celebrities have become involved in promoting platforms, as many of them don’t understand the risks associated with investing in NFTs. This lawsuit serves as a stark reminder that promoting platforms without having a thorough understanding of the product can be legally precarious.
As celebrities continue to cash in on this digital trend, cautionary tales like this one should remind those involved to be prudent when promoting platforms and products, and to understand the legal risks associated with shilling NFTs.
