YouTube influencer and social media personality Logan Paul and his cryptocurrency venture, CryptoZoo, are facing a class-action lawsuit, as reported by recent court filings on Feb. 2 in the Western District Court of Texas. The lawsuit, filed by plaintiff Don Holland, alleges that Paul and executives at CryptoZoo (CZ) were involved in a “fraudulent venture,” deceiving thousands of purchasers of their nonfungible tokens (NFTs) by making false promises of exclusive access to cryptocurrency assets and benefits, and later abandoning the project, keeping the funds for themselves.
The lawsuit has been submitted by Ellzey & Associates and Attorney Tom and Associates. In a YouTube video posted on Jan. 16, Attorney Tom stated that they are suing Paul and the CryptoZoo team after weeks of investigation and speaking to several victims of the alleged scam. The suit also names other individuals as defendants, including Jeff Levin, Jake Greenbaum, Danielle Strobel, Eddie Ibanez and Ophir Bentov.
Despite the lawsuit, Paul had recently announced a $1.5 million recovery plan for the angry and dissatisfied investors in the CryptoZoo project via a video on Twitter on Jan. 13. He stated that he was no longer pursuing a lawsuit against CoffeeZilla over allegations that the project was a scam, as he wanted to focus on helping the “fans and supporters” of CryptoZoo.
Paul’s recovery plan consists of three stages. In the first stage, Paul and Jeff Levin, the co-founder of CryptoZoo, would burn their ZOO token holdings, with Paul emphasizing that this move would not benefit them financially and would only add value to the tokens held by purchasers. In the second stage, Paul would personally commit 1,000 Ether (ETH) to the project, allowing “disappointed” investors to burn their NFTs and receive their initial investment of 0.1 ETH back. The third and final stage would involve delivering the game as outlined in the CryptoZoo whitepaper.
This class-action lawsuit against Paul and CryptoZoo marks a significant development in the world of cryptocurrency and NFTs, and it remains to be seen what consequences it may have for the YouTube influencer and his team. The lawsuit alleges that Paul and the CryptoZoo executives were involved in a scam that stole millions of dollars worth of cryptocurrency from thousands of purchasers, and the plaintiffs are seeking punitive damages in addition to other reliefs. The court proceedings are expected to provide further insight into the details of the case, and it will be interesting to see how the lawsuit plays out and what outcome it may have for the crypto community.
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