Logan Paul and CryptoZoo hit with lawsuit as investors take action
Plaintiff Don Holland has filed a lawsuit against CryptoZoo and Logan Paul, alleging the YouTube influencer’s “fraudulent venture” executed a “rug pull.”
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CryptoZoo and Logan Paul have been named as defendants in a newly filed class-action lawsuit, which alleges they stole millions of dollars worth of purchaser’s cryptocurrency via a “fraudulent venture.”
In a court filing on Feb. 2 in the District Court of the Western District of Texas, plaintiff Don Holland alleged that Paul and executives at CryptoZoo (CZ) “executed a ‘rug pull’” by promising purchasers of the nonfungible tokens (NFTs) exclusive access to crypto assets among other benefits, but ultimately abandoned the project and kept the funds.
“As part of Defendants’ NFT scheme, Defendants marketed CZ NFTs to purchasers by falsely claiming that, in exchange for transferring cryptocurrency to purchase the CZ NFT, purchasers would later receive benefits, including, among other things, rewards, exclusive access to other cryptocurrency assets, and the support of an online ecosystem to use and market CZ NFTs,” it wrote.
“In reality, soon after completing the sale of all their CZ NFTs, Defendants, together with others […] transferred millions of dollars’ worth of purchasers’ cryptocurrency to, among other places, wallets controlled by Defendants,” it alleged.
The lawsuit was submitted by attorneys from Ellzey & Associates and Attorney Tom and Associates, the latter of which is the law firm run by YouTube personality Attorney Tom.
In a YouTube video on Jan. 16, Attorney Tom told viewers that they are suing Paul over the alleged crypto scam after “weeks of investigation and speaking to a number of Crypto Zoo victims.”
Other defendants named in the suit include Danielle Strobel, Jeff Levin, Eddie Ibanez, Jake Greenbaum (Crypto King) and Ophir Bentov (Ben Roth), according to Attorney Tom.
This lawsuit comes despite Paul unveiling a $1.5 million recovery plan for disgruntled investors in the CryptoZoo project via a video on Twitter on Jan. 13.
He also revealed that he is no longer going to sue CoffeeZilla over his allegations that his project is a scam, stating that suing him is “not going to help Cryptozoo holders,” adding that he wants to focus on “fans and supporters of him.”
Related: Logan Paul backflips on defamation lawsuit against Coffeezilla, apologizes
Paul outlined his recovery plan will consist of three stages — stating the first stage will be himself and the co-founder of CryptoZoo, Jeff Levin, burning their ZOO token holdings.
He clarified in doing this they will “have no financial upside” in the game, and it will “add value to the holders’ tokens.”
Paul claimed the second stage will involve him personally committing 1,000 Ether (ETH) to the project so that “disappointed” investors can burn their NFTs to get their initial investment of 0.1 ETH back, the cost to mint the NFT.
Meanwhile the third and final stage he hopes to “deliver the game as outlined in the whitepaper.”