A U.S. federal judge has advised against allowing Logan Paul to shift responsibility for the failure of his NFT project, CryptoZoo, onto his co-founders. The development marks a key turn in the ongoing legal battle involving disappointed investors in the high-profile crypto initiative.
CryptoZoo Lawsuit Moves Forward Despite Paul’s Motion
In a recent court recommendation, Texas Magistrate Judge Ronald Griffin urged the court to reject Paul’s motion to enter a default judgment against CryptoZoo co-founders Eduardo Ibanez and Jake Greenbaum. The two have not responded in court, but the judge stressed that granting Paul’s request could create inconsistent legal outcomes.
“To rule on Paul’s motion at this time would undeniably result in inconsistent judgments,” Judge Griffin stated, adding that all defendants appear to share liability in the case.
Investors Accuse All Parties of Fraud in CryptoZoo Project
The lawsuit, originally filed in early 2023 by buyers of CryptoZoo NFTs, accuses Paul, Ibanez, Greenbaum, and others of engaging in a fraudulent scheme. Plaintiffs allege that the project was a classic rug pull, promoting unfulfilled perks and features, including a blockchain game that was never launched.
CryptoZoo allowed users to buy NFT “eggs” that would hatch into animals, which could then be bred into hybrids and traded for tokens. The promised game, however, never went live, leaving buyers with digital assets of questionable value.
Paul Claims He Was Misled by Co-Founders
In a January 2024 counterclaim, Paul alleged that Ibanez and Greenbaum deceived him during the project’s development, causing its downfall. But the court is not convinced that his legal strategy reduces the risk of conflicting rulings in the broader case.
The judge emphasized that all defendants were similarly situated and must face allegations of joint liability together.
Refunds Offered But Lawsuit Continues
In 2024, Paul offered refunds to NFT buyers, placing $2.3 million into a fund with the condition that recipients waive their right to sue. Buyers received 0.1 ETH, equivalent to the original sale price in 2021.
Despite this, the broader lawsuit continues, and Paul remains a central defendant in the fraud allegations.
Defamation Case Against YouTuber Also Ongoing
Separately, Paul has sued another YouTuber over critical videos covering the CryptoZoo controversy. That case is still active, further entangling the influencer in complex crypto litigation.
The CryptoZoo case reflects growing legal scrutiny of influencer-led blockchain projects, especially those involving NFT investments.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.