Crypto speculators who say they’re collectively out tens of millions of dollars on MetaZoo NFTs are suing Steve Aoki and Matthew Kalish for violating FTC guidelines. Five years after the non-fungible token boom, cryptocurrency traders who feel cheated out of millions have filed a lawsuit against Steve Aoki and DraftKings co-founder Matthew Kalish for failing to disclose that they were paid by MetaZoo to promote the digital collectibles on their social media channels. The complaint alleges that MetaZoo — which started out as a tabletop game company in 2020 — grew immensely popular following Aoki and Berger’s endorsements. They went far beyond promoting their products, however.
According to the suit, the two defendants went as far as to tell their followers that the NFTs couldn’t be considered a gambling risk as their value was expected to continually rise during a livestreamed poker game. “There is a specific set of rules that are in place to protect consumers, and it’s of great importance that influencers know and understand those rules, because they are requirements and not suggestions,” said one of the plaintiffs, Evan Berger. The class-action lawsuit proposes six classes in states like Florida, California, New York, Connecticut, Delaware, and Washington, DC, seeking damages, restitution, and disgorgement of profits.
NFTs employ blockchain validation to enable immutable smart contracts, which protect the information stored on them unless a series of conditions are met. While practical applications include receipts or tokenized assets, the most buzzed-about use case of five years ago was digital collectibles. Speculator interest led to a market bubble in 2020 that burst in 2021, leaving remorseful buyers holding the bag.
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