A federal judge has denied dismissal motions in a significant lawsuit involving Bored Ape Yacht Club NFTs, targeting celebrities including Justin Bieber, Madonna, and numerous other high-profile figures.

The class action lawsuit, filed in December 2022, alleges that defendants engaged in "manufactured celebrity endorsements and misleading promotions" that led investors to make "losing investments at drastically inflated prices." The case includes prominent defendants such as Yuga Labs, Guy Oseary, Adidas, Serena Williams, Khaled, Snoop Dogg, Post Malone, Steph Curry, and Sotheby's.

Key aspects of the lawsuit include:

• Multiple alleged violations of California business and consumer laws
• Claimed violations of the Exchange Act and Securities Act
• Connections between Bored Ape NFTs and the collapsed FTX platform
• Focus on the timeline of BAYC NFTs' rise and subsequent price decline

Yuga Labs attempted to dismiss the case with a 60-page motion, arguing that the NFTs don't qualify as securities and denying any "materially false or misleading statement, omission or fraudulent scheme." Individual defendants, including Bieber, claimed their promotional social media posts were non-actionable.

Judge Fernando M. Olguin rejected the dismissal motions without prejudice, setting a September 3rd deadline for parties to submit a proposed schedule focusing specifically on determining whether these NFTs qualify as securities. If the NFTs are classified as securities, defendants may submit new dismissal motions or seek reinstatement of their original motions.

The case highlights ongoing regulatory and legal challenges surrounding NFTs and celebrity endorsements in the cryptocurrency space, with potential implications for future digital asset promotion and securities classification.

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