A federal judge has denied dismissal motions in a significant lawsuit involving Bored Ape Yacht Club NFT promotions by celebrities including Justin Bieber, Madonna, and others.

The class action lawsuit, filed in December 2022, alleges that celebrities and promoters engaged in "manufactured celebrity endorsements and misleading promotions" that led investors to make "losing investments at drastically inflated prices."

Key defendants in the case include:

• Yuga Labs
• Guy Oseary
• Adidas
• Multiple celebrities (Serena Williams, DJ Khaled, Snoop Dogg, Post Malone, Steph Curry)
• Sotheby's (added August 2023)

The lawsuit claims multiple violations of:

• California business and consumer laws
• Exchange Act
• Securities Act

While Yuga Labs submitted a 60-page dismissal motion arguing the NFTs don't constitute securities and denied any misleading statements, Judge Fernando M. Olguin has rejected all dismissal motions without prejudice.

The court has set a September 3rd deadline for parties to submit a proposed schedule focusing specifically on determining whether the NFTs qualify as securities under SEC definitions. If the NFTs are classified as securities, defendants may submit new dismissal motions or seek reinstatement of original ones.

The case highlights ongoing concerns about celebrity crypto promotions and their impact on consumer investments, with particular focus on the dramatic rise and fall of NFT valuations during the market peak.

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