by - Logan Paul has been named as a defendant in a lawsuit in which he claims he supports a crypto scam.
- He claims the CryptoZoo initiative is a “carpet pull” as it never started and holds buyers’ money.
- YouTuber star Paul had previously revealed a three-stage recovery plan to return lost funds.
Logan Paul has been named as a defendant in a lawsuit alleging that the YouTube star helped commit a crypto “carpet pulling” scam by promoting an NFT-based project that collects buyers’ money.
Plaintiff Don Holland is suing the media personality and professional wrestler for promoting CryptoZoo, a startup that sells NFTs but then never started and failed to refund customers.
In the proposed class action lawsuit filed Thursday, “The defendants promoted CryptoZoo products to consumers unfamiliar with digital currency products using Mr. Paul’s online platforms, leading to tens of thousands of people purchasing the products in question.”
“Unbeknownst to customers, the game did not work or even existed at all, and the Defendants manipulated the digital currency market for Zoo Tokens to their advantage,” he said.
After finishing the sale of all CryptoZoo NFTs, the defendants and others allegedly transferred millions of dollars in buyers’ cryptocurrencies to wallets controlled by the defendants.
Paul’s associates Danielle Strobel, Jeff Levin, Ebbie Ibanez, Jake Greenbaum, and Ophir Bentov also appeared as defendants in the case, according to the court filing.
“Carpet pulling” is crypto scam in which a developer sells NFTs or other tokens associated with a project to people before the project actually starts. The developer then leaves the project and keeps the money.
In December, YouTube researcher Stephen “Coffeezilla” Findeisen posted a series of videos that CryptoZoo claims to be Paul’s “biggest scam.”
Paul threatened to sue the creator before making an astonishing facial expression to claim that he was glad that issues with the project were brought up.
The YouTuber has since said that it plans to implement a three-phase plan to try to get back the funds lost by buyers.
In the first phase, Paul and CryptoZoo’s co-founder will burn all their assets in the project’s native token to increase prices and ensure they don’t have any more stake in the project.
Paul then plans to spend 1,000 ether tokens, valued at just under $1.7 million on Friday, to buy NFT from investors willing to abandon the CryptoZoo project.
The media personality and professional wrestler said the third phase of Paul’s recovery plan was to “deliver the game as stated in the whitepaper”.
Paul and the plaintiff’s attorneys Attorney Tom It didn’t immediately respond to Insider’s requests for comment.
Read more: As the backlash intensifies, Logan Paul apologizes for his disastrous crypto venture. Here’s how we got here and what’s next.
