In a recently filed class-action complaint, CryptoZoo and Logan Paul have been listed as defendants. The lawsuit claims that through a “fraudulent business,” they stole customers’ cryptocurrencies valued at millions of dollars.
Plaintiff Don Holland claimed in a court document filed on February 2 in the District Court of the Western District of Texas that Paul and executives at CryptoZoo “executed a rug pull” by promising buyers of the non-fungible tokens (NFTs) exclusive access to crypto assets among other benefits, but ultimately abandoned the project and kept the money.
“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.
Attorneys from Ellzey & Associates and Attorney Tom and Associates, the latter of which is the legal office led by YouTube star Attorney Tom, filed the case.
After “weeks of research and speaking to a number of Crypto Zoo victims,” according to Attorney Tom, they are suing Paul over the alleged cryptocurrency fraud, he announced to viewers of a YouTube broadcast on January 16th.
According to Attorney Tom, the lawsuit also names Jake Greenbaum (Crypto King), Ophir Bentov (Ben Roth), Danielle Strobel, Jeff Levin, Eddie Ibanez, and Danielle Strobel.
Paul released a $1.5 million recovery plan for CryptoZoo project investors through a video on Twitter on January 13. Nevertheless, this lawsuit was filed.
A lawsuit against CoffeeZilla, he said, “is not going to benefit Cryptozoo holders” and that instead, he should concentrate on his “friends and supporters.” He also disclosed that he is no longer intending to fight CoffeeZilla over his claims that his project is a hoax.
In his three-step recovery plan, Paul stated that the first stage would involve him and Jeff Levin, the other co-founder of CryptoZoo, burning their ZOO token holdings.
He made it clear that by doing this, they would “have no financial advantage” in the game and that the holders’ tokens would “gain value.”
Paul said that in order for “disappointed” investors to obtain their original investment of 0.1 ETH, the cost to mint the NFT, back in the second stage, he will personally contribute 1,000 Ether to the project.
In the meanwhile, he wants to “deliver the game as specified in the whitepaper” in the third and final stage.