CryptoZoo, an online game project that sells non-fungible tokens (NFTs) to players, is facing a class action lawsuit for allegedly conducting a fraudulent scheme that took millions of dollars worth of cryptocurrency from thousands of customers.
The class action was filed in a Texas federal court by a police officer who bought digital currency from CryptoZoo, claiming that the company and its executives, including YouTube star Logan Paul, ran an illegal “rug pull” scheme where they lured customers to buy tokens for a game they were never able to play.
According to the class action complaint, CryptoZoo launched its NFT project in August 2021, promising players could use their tokens to buy, breed, and trade digital animals called “zoos” in a virtual world. The company also claimed that its NFTs backed real-world conservation efforts and that it had partnered with reputable organizations such as the World Wildlife Fund.
The class action alleges that CryptoZoo never delivered on its promises and that its NFTs were worthless and unusable. The lawsuit says the plaintiff and thousands of others bought tokens to use in the CryptoZoo game that never existed in an illegal “rug pull” scheme orchestrated by the company’s executives.
The class action accuses CryptoZoo and its insiders of violating federal and state laws, including the Securities Act of 1933, the Texas Securities Act, and the Texas Deceptive Trade Practices Act. The plaintiff seeks to represent a class of all persons who purchased CryptoZoo tokens and to recover damages, restitution, and injunctive relief.
The lawsuit also names Logan Paul as a defendant, alleging that he used his online platforms to promote CryptoZoo’s products to consumers unfamiliar with digital currency products, leading to tens of thousands of people purchasing said products.
The class action lawsuit claims that Paul was a co-founder and co-owner of CryptoZoo and that he received a large share of the proceeds from the token sales.
CryptoZoo and Logan Paul have yet to respond to the class action lawsuit.