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Logan Paul Hit With Major Lawsuit Over CryptoZoo

Since its launch, Logan Paul's "CryptoZoo" has been at the very center of a scandal that has only grown more complicated as time goes on. Logan Paul's NFT-based game purports to allow players to collect and hatch animals, represented in the game by — you guessed it — NFTs. Unfortunately for Paul and players of the game, the game has had serious issues right from the get-go, to the point where the official "CryptoZoo" website has been promising a forthcoming update to the game for quite some time. 

See, people have reported not being able to hatch their cute crypto critters, which is a big problem when that's the core concept of the game. Things came to a head when YouTuber Coffeezilla posted a series of videos investigating the game and Paul's associates who worked on its development. What he uncovered appeared to be a scam involving multiple people, including Paul, that left investors and players high and dry.

Logan Paul responded almost immediately in a video that refuted Coffeezilla's findings, threw many of his former collaborators under the bus, and ended in the threat of a lawsuit against Coffeezilla. Though Paul eventually deleted his fiery defense video and thanked Coffeezilla for bringing many of the issues with "CryptoZoo" to light, the drama is far from over. Now Logan Paul and several of the people who have worked on "CryptoZoo" are facing a lawsuit that accuses them of violating, among other laws, the Deceptive Trade Practices Act of Texas. Here's what we know so far about this shocking development in the "CryptoZoo" scandal.

CryptoZoo's investors fire back

Coffeezilla alerted his followers on Twitter to the new lawsuit with a screenshot of the legal documents, and the authenticity of the lawsuit was later confirmed by attorney and YouTuber Tom Kherkher on Twitter. Kherker explained, "We have officially filed a class action lawsuit in the Western District of Texas against Logan Paul et al. for the 'CryptoZoo' fiasco. (This is in addition to the numerous cases heading to arbitration on the matter)."

In an article published earlier this week for Time, Kherker and one of the plaintiffs involved with the lawsuit explained why they are going after Paul and his "CryptoZoo" cohorts. They paint a picture of fans who were duped into pumping money into this project, only to never see a proper return on their investments. Plaintiff Rueben Tauk described feeling like he had been "brainwashed" into trusting Paul with tens of thousands of dollars.

The filing obtained by CoffeeZilla makes many of the same allegations against Paul that were first raised in the YouTuber's exposé: "The Defendants executed a 'rug pull,' which is a colloquial term used to describe a scheme in which an NFT developer solicits funds from prospective NFT purchasers promising them certain benefits. Once the purchasers' funds are used to purchase the NFTs, the developers abruptly abandon the project and fail to deliver the promised benefits all while fraudulently retaining the purchasers' funds." The document also goes on to reproduce a number of screenshots from Paul's "CryptoZoo" Discord channel, in which Paul claims that the game was "not intended as an investment vehicle," and that he would not be held responsible for players' financial losses. 

All in all, the document paints a grim picture of how and why the "CryptoZoo" community eventually began to turn on Logan Paul.

What's next for Logan Paul and this lawsuit?

Logan Paul is reportedly furious over the management of "CryptoZoo" and the missteps that have been made since the game launched, Time reports. The influencer has declined to issue any statements or speak to any journalists for stories regarding the lawsuit, but his legal team appears to believe that everything will be alright in the end. Logan Paul's lawyer, Jeffrey Neiman, explained to Time that he doesn't believe Logan is directly responsible for how poorly this all played out. "While Logan is disappointed with the way CrytpoZoo has been handled, when all the facts come to light, it will be clear that Logan always acted in good faith," Neiman said. "Bad actors hijacked the project at Logan's expense, as well as others, and we are confident any claims of fraud will be discredited throughout this process.

Since the Coffeezilla video blew up and Paul's angry response video didn't get the reaction he might've hoped for, the influencer has seemingly attempted to make things right for the people burned by "CryptoZoo." In mid-January, Time reports, Logan Paul refunded investors to the tune of $1.3 million and vowed to get "CryptoZoo" in working order. 

Unfortunately, the damage had already been done, and Paul's latest promises don't appear to be good enough for those involved in lawsuit, which doesn't sound like it will be going away any time soon. As Tom Kherker told Time earlier this week, "We're committed to the long haul. If we have to go arbitrate 500 cases, case after case after case after case, that's something that we'll do."