The increasing adoption of cryptocurrencies has triggered more growth in the industry. As the sector grows, more cases of fraud and rug pull on investors also skyrocket. Some past incidents led to class action lawsuits against prominent influencers who investors felt aided in this nefarious activity.
A recent report has revealed that a popular YouTube influencer faces a class action based on fraudulent venture and rug pull.
Lawsuit Alleges Defendants Defrauded Crypto Investors
The lawsuit against Logan Paul and CryptoZoo alleges the theft of investors’ assets worth millions of dollars through a fraudulent venture. The plaintiff of the case, Don Holland, filed the class action on February 2 in the District Court of the Western District of Texas.
According to the lawsuit’s documentation, the plaintiff accused Paul and the executives of CryptoZoo of carrying out a rug pull. He noted that the defendants promised some benefits to buyers of the non-fungible tokens (NFTs), which they failed to fulfill.
These include exclusive access to some crypto tokens, an online support ecosystem for marketing the CryptoZoo NFTs, and others. However, the defendants walked away with investors’ money as they abandoned the digital asset project.
Also, the plaintiff noted that the defendants completed the sales of all the CryptoZoo NFT collections, which amounted to millions of dollars of investors’ assets. They later moved the funds to unknown wallets that only they could control.
Attorney Tom and Associates and Ellzey & Associates are the lawyers that submitted the lawsuit. Tom Kherkher from Attorney Tom and Associates confirmed they filed a class action lawsuit against Paul and others via his Twitter post. The lawyer noted that the recent lawsuit is one of many cases going to arbitration concerning CryptoZoo.
Also, on January 16, Attorney Tom posted a YouTube video on his channel informing viewers about a lawsuit against Paul over an alleged crypto scam. The lawyer mentioned that the case is coming after making some investigations and discussions with some victims of CryptoZoo.
Further, the attorney listed the names of other defendants in the lawsuit. These include Jeff Levin, Danille Strobel, Ophir Bentov (Ben Roth), and Jake Greenbaum (Crypto King).
Paul Discloses Recovery Plans For Investors
YouTube influencer Paul revealed his $1.5 million recovery plans in January for unsatisfied investors of the CryptoZoo project before the lawsuit. He mentioned discontinuing the intention to sue CoffeeZilla, a fellow YouTuber, for defamation. Notably, Coffeezilla accused Paul of running a scam with his NFT project.
Paul stated that he’s focusing on fixing issues related to CryptoZoo and setting things right with the investors and his fans. According to the YouTuber, his recovery plan encompasses three stages. The first stage will involve him and Jeff Levin, the co-founder of CryptoZoo, as they intend to burn their ZOO tokens. Paul noted this action would remove any financial gain for them but would boost the value of customers’ tokens.
In his second step, Paul wants to commit 1,000 ETH tokens to the project. This will help the investors to burn their NFTs and recover the initial investment value of 0.1 ETH. Finally, the YouTuber plans to ensure the game regains its original functionalities indicated in its whitepaper.
Featured Image From Pixabay, sergeitokmakov l Charts From Tradingview
