Influencer Logan Paul to buy back NFTs linked to failed CryptoZoo game – but those who participate must waive right to sue him
YouTube influencer Logan Paul has initiated a partial refund scheme for those who invested millions in his failed game CryptoZoo via once-fashionable non-fungible tokens (NFTs).
Paul said he was “personally committing” more than $2.3 million (£1.8m) to repurchase certain NFTs bought through CryptoZoo, with users able to file online claims until 8 February.
But investors are likely to recoup only a fraction of what they spent on the game, and those who take part in the buyback must relinquish any further legal claims against Paul over CryptoZoo.
Paul is currently facing a class-action lawsuit over the game, filed last year in the Western District of Texas, which alleges that he and other people involved in CryptoZoo promoted the project to “consumers unfamiliar with digital currency products” and “manipulated the digital currency market for Zoo Tokens to their advantage”.
Class action lawsuit
Depending on how many people take part in the buyback, the scheme could drastically reduce Paul’s exposure in the pending case and result in a more favourable settlement, according to Rob Freund, a Los Angeles-based lawyer specialising in marketing and e-commerce issues.
Freund noted that Paul on Thursday filed an Answer & Cross-Claim in the class-action, which Paul called “a lawsuit in federal court in Texas to hold these bad actors accountable”.
“The Egg buyback may be a strategy to take some of the wind out of the plaintiffs’ damages theories while still allowing him to recover from the other alleged wrongdoers,” Freund wrote on X, formerly Twitter.
Under the buyback scheme Paul said users would receive 0.1 Ether token for each of their eligible NFTs, known as Base Eggs and Base Animals.
Logan Paul is being sued in a class action about the CryptoZoo NFT disaster.
Today, he filed an Answer & Cross-Claim in that same case (which he’s calling “a lawsuit in federal court in Texas to hold these bad actors accountable”).
The Egg buyback may be a strategy to take some… https://t.co/uTQ15vFKW4
— Rob Freund (@RobertFreundLaw) January 4, 2024
These NFTs were intended as the starting point for a Pokémon-inspired game that would allow users to “breed” hybrid animals that would be valued in $ZOO tokens based on their rarity.
The original NFTs sold for 0.1 Ether in September 2021, but the token’s value has dropped by 37 percent since then.
“This buy-back is a way for me to make whole those who intended to play CryptoZoo,” Paul wrote on X. “The buy-back is not intended to compensate those who gambled on the crypto market and lost.”
CryptoZoo was “not intended as an investment vehicle”, he added.
Paul said he did not make “a single penny” from the project and was “highly disappointed” when it was not delivered.
Paul initially launched the game in an episode of his “Impaulsive” podcast in August 2021, but after selling millions of NFTs and $ZOO tokens he stopped talking about it.
After another YouTube influencer, CoffeeZilla, in December 2022 released a series of videos showing his investigation into the failed project, Paul said he wanted to “make this right”.