In December 2022, two BAYC NFT investors filed a class action lawsuit alleging that celebrities promoting the Bored Ape Yacht Club had received undisclosed compensation from Yuga Labs and associated companies without telling the public. The lawsuit named 37 defendants including Madonna, Justin Bieber, Kevin Hart, Jimmy Fallon, Paris Hilton, Snoop Dogg, and others, claiming they received free NFTs and cash payments while posting promotional content that suggested they had purchased the digital assets at market prices. S.
District Judge Fernando Olguin. The core allegation was straightforward: celebrities had financial relationships with Yuga Labs that they did not disclose to the public, and this undisclosed promotion artificially inflated BAYC NFT prices, causing losses to ordinary investors who purchased based on what appeared to be organic celebrity enthusiasm. According to the lawsuit filed on December 8, 2022, in the Central District of California, the compensation allegedly flowed through MoonPay USA LLC to disguise the nature of the financial relationships between the celebrities and Yuga Labs.
Table of Contents
- What Specific Compensation Did Celebrities Allegedly Receive Without Disclosure?
- Who Were the Named Defendants and What Was Their Role?
- How Did the Alleged Payment Scheme Work to Disguise Celebrity Compensation?
- What Were Investors’ Alleged Losses and How Did the Class Action Work?
- Why Did Judge Fernando Olguin Dismiss the Case, and What Does That Mean?
- What Does This Dismissal Mean for Celebrity Endorsements and NFT Promotions?
- Current Status of the Case and What It Means for Affected Investors Now
What Specific Compensation Did Celebrities Allegedly Receive Without Disclosure?
The lawsuit alleged that Yuga Labs and celebrity promoters engaged in an undisclosed compensation scheme where high-profile names received BAYC NFTs and cash payments in exchange for promotional social media posts. For example, when celebrities posted photos of themselves with Bored Apes or touted the project’s benefits, they created the false impression that they had purchased the NFTs at full market price, when in fact they had received them for free along with additional cash compensation. This type of undisclosed endorsement relationship violates securities fraud principles because investors rely on apparently organic enthusiasm from trusted public figures when deciding whether to invest. The plaintiffs alleged that Greg Oseary, described as a talent agent and intermediary, facilitated these relationships between Yuga Labs and the celebrities.
The payments were structured to move through MoonPay USA LLC, which the lawsuit characterized as an intentional mechanism to obscure the direct financial connection between the company paying for promotion and the celebrities receiving payment. By routing compensation through a payment platform rather than paying celebrities directly, the defendants allegedly created a layer of separation designed to make the endorsements appear more authentic. However, the lawsuit did not allege that every celebrity knew the full scope of what was happening. Some celebrities may have believed they were simply receiving perks or compensation for appearances, without understanding that the marketing strategy involved concealing these relationships from potential BAYC investors.
Who Were the Named Defendants and What Was Their Role?
The lawsuit named 37 defendants across two broad categories: celebrities and corporate entities. The celebrity defendants included A-list names such as Madonna, Justin Bieber, Kevin Hart, Jimmy Fallon, Paris Hilton, Snoop Dogg, Gwyneth Paltrow, Serena Williams, Post Malone, The Weeknd, and NBA player Steph Curry. On the corporate side, the defendants included Yuga Labs Inc. and its executive officers, Greg Oseary (the alleged talent intermediary), and MoonPay USA LLC.
The plaintiffs’ theory was that Yuga Labs and its executives orchestrated the compensation scheme with the goal of artificially inflating BAYC nft prices. The celebrities were cast as the instruments of this scheme—receiving compensation to perform a marketing function—while MoonPay allegedly facilitated the payments. The executives of Yuga Labs were named because the plaintiffs argued they directed or knew about the undisclosed compensation arrangement. A key limitation in the plaintiffs’ case was that they had to prove not only that undisclosed compensation existed, but that the digital assets themselves constituted “securities” under federal law. This distinction became critical to the lawsuit’s fate, as Judge Fernando Olguin would later explain in his dismissal order.
How Did the Alleged Payment Scheme Work to Disguise Celebrity Compensation?
According to the lawsuit, Yuga Labs provided BAYC NFTs directly to celebrities and arranged cash payments, often channeled through MoonPay USA LLC to create distance between the company and the endorsers. For instance, when a celebrity posted a photo holding a Bored Ape or wrote about the project’s investment potential, followers and potential investors saw what appeared to be an authentic purchase and endorsement. In reality, the NFT had been gifted, and the celebrity had also received cash payment for the promotional post. This structure served two purposes: it made the celebrity endorsement appear organic and uncompensated (a “grassroots” promotion), while simultaneously creating plausible deniability for Yuga Labs if questioned about whether they were paying for endorsements.
The involvement of MoonPay—a legitimate payment processor—added another layer of separation. The plaintiffs alleged this was deliberately designed to obscure what was essentially a coordinated advertising campaign disguised as independent celebrity enthusiasm. One important caveat: not all celebrity social media posts about BAYC were necessarily part of this formal compensation arrangement. The lawsuit focused on celebrities who received documented NFT transfers and payments, but determining exactly which posts were compensated and which were not became complicated during discovery.
What Were Investors’ Alleged Losses and How Did the Class Action Work?
The plaintiffs alleged that celebrity promotions artificially inflated BAYC NFT prices above what they would have been in a fair, transparent market. Investors who purchased Bored Ape NFTs based on what appeared to be celebrity enthusiasm—not knowing these celebrities were being paid by the company—suffered losses when the hype eventually cooled and prices declined. The class action lawsuit sought to represent all investors who purchased BAYC NFTs during the period when the undisclosed compensation scheme was operating. The two named plaintiffs, Adonis Real and Adam Titcher, purchased BAYC NFTs and alleged they would not have done so had they known about the undisclosed celebrity compensation relationships.
In a class action framework, if the lawsuit had succeeded, any investor who met the criteria could have claimed compensation from a settlement fund. The amount each claimant would recover would typically be based on their documented losses—the difference between what they paid for the NFT and its value at a later date, or proceeds from a sale at a loss. A critical tradeoff in class actions is that while they allow many individuals to pursue claims that would be too small to bring individually, the compensation per person is often modest, and the process can take years. Even if the plaintiffs had won, the actual recovery for each investor would have depended on the settlement amount, the total number of valid claims, and how attorneys’ fees were structured.
Why Did Judge Fernando Olguin Dismiss the Case, and What Does That Mean?
On October 1, 2025, U.S. District Judge Fernando Olguin issued an order dismissing the lawsuit. The judge’s core finding was that the plaintiffs failed to establish that BAYC NFTs and ApeCoin (the associated token) qualified as “securities” under federal law. This is a critical legal distinction. If the digital assets are not securities, then federal securities fraud laws don’t apply, and the plaintiffs’ case collapses even if all their factual allegations about undisclosed compensation are true.
The judge’s reasoning followed established securities law: to qualify as a security, an investment must meet the criteria set out in the Howey Test, which examines whether there is an investment of money in a common enterprise with an expectation of profits derived from the efforts of others. The defendants had argued that NFTs in this case were collectibles or utility tokens, not securities. Judge Olguin agreed, finding that the plaintiffs had not adequately demonstrated that BAYC NFTs met the legal definition of securities. This ruling carries an important warning for future NFT litigation: even if a company engages in undisclosed promotional practices, those practices may not be remediable through federal securities law if the underlying asset is not deemed a security. Investors harmed by deceptive NFT promotion might need to pursue claims under consumer protection laws, state law fraud statutes, or FTC regulations rather than federal securities law. The securities dismissal closed this particular legal avenue, leaving no remaining federal securities claims to pursue.
What Does This Dismissal Mean for Celebrity Endorsements and NFT Promotions?
The dismissal of the BAYC celebrity lawsuit does not mean that celebrity endorsements of cryptocurrencies and NFTs can proceed entirely without restriction or transparency. Federal and state consumer protection agencies, as well as the FTC, have guidelines about endorsement disclosure. When a celebrity is compensated for recommending a product, that compensation typically must be clearly disclosed to the audience.
However, the securities law dismissal does suggest that if celebrities receive undisclosed compensation for promoting collectible NFTs (rather than securities), the primary enforcement mechanisms may come from consumer protection regulators rather than private securities class actions. For instance, the FTC could pursue an action against Yuga Labs or the celebrities themselves for deceptive endorsement practices without needing to establish that the NFTs were securities. This distinction means that the remedies and compensation available to harmed consumers might differ from a securities settlement.
Current Status of the Case and What It Means for Affected Investors Now
As of March 2026, the case remains dismissed. No settlement was reached, and all named defendants, including the celebrities, were cleared of charges related to this lawsuit. The two original plaintiffs, Adonis Real and Adam Titcher, did not appeal the dismissal.
While this means no compensation will be provided through this particular class action, it does not prevent investors from exploring other legal remedies if they believe they were defrauded. Looking forward, the BAYC celebrity lawsuit serves as a cautionary tale about the intersection of securities law, celebrity promotion, and cryptocurrency. The case highlights how difficult it can be to prove securities fraud in the NFT space when the underlying assets’ legal classification is disputed. Future cases involving celebrity promotions of crypto assets may rely more heavily on consumer protection theories, state law fraud claims, or FTC enforcement actions rather than federal securities class actions.
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