Logan Paul offers refunds for CryptoZoo, the failed and alleged scam NFT game inspired by Pokémon which launched in 2021. The catch? You can’t sue him if you get a refund.
In one X (formerly Twitter) post on Thursday, Paul announced that he is “personally pledging” more than $2.3 million to redeem NFTs purchased through CryptoZoo. Claims can be submitted electronically until February 8.
“I never made a dime off the project, period. In fact, the opposite is true because I spent hundreds of thousands of dollars trying to make it happen,” Paul said in his post. “Like you, I was very disappointed that the game didn’t deliver.”
Claimants will receive 0.1 ETH per eligible NFT — known as “Base Eggs” and “Base Animals”. Players were supposed to be able to “breed” animals that were “hatched” from the base NFT they purchased, which would create “hybrid” animals that were also NFTs. Hybrid animals are not eligible for the buy-back program.
The form’s terms and conditions also note that any submitted NFTs that Paul “in his sole discretion determines to be ineligible” will not be returned. To be eligible for a refund, the plaintiffs must also agree to waive any “actual or anticipated claims against Paul” — meaning they promise not to take legal action against him in connection with CryptoZoo.
The influencer, facing a class action for allegedly making millions of dollars in cryptocurrency by promoting a game that ended up not existing, also filed a cross-examination. In one X postsaid he has “filed a lawsuit in Texas federal court to hold these bad actors accountable.”
“This lawsuit is the result of an exhaustive investigation that included a review of all conversations and tracking of bad commercial activity related to the project,” Paul continued in his post X. “Infringing commercial activity done behind the back us, without our knowledge, and with the intention of deceiving us all”.
Rob Freund, a Los Angeles-based attorney who represents brands and creators, told TechCrunch that the buyback program could be Paul’s attempt to minimize losses. Class actions can be “disastrous” for defendants, as damages can include everything the plaintiff and class members originally lost, in addition to punitive damages and attorney’s fees. Freund suggested that by returning the NFTs in exchange for waiving claims against him, Paul can settle individually with class members, effectively minimizing potential damages.
“Paul can bet (or at least hope) that several people who would otherwise be potential class members will take him up on this offer and drastically reduce his potential exposure to the pending case by doing so,” Freund said. “That would let him turn to a much more favorable settlement.”
Paul described the NFT project as a “really fun game that makes you money” when he announced it during an August 2021 episode of his podcast, “Impaulsive.” CryptoZoo was released as a collectible game using Ethereum — each NFT was an egg that was supposed to hatch into an animal assigned one of five rarity levels. These animals could be bred to produce hybrid animals, which also varied in rarity. Each time an egg hatched, it was supposed to yield a certain amount of $ZOO tokens, which were determined by the rarity of the animal. Players were supposed to be able to either buy more eggs or cash out each time an animal hatched.
Paul also promised that CryptoZoo would include interactive minigames and that the project would eventually include “Enter the metaverse.”
ONE tripartite research from YouTube freelance reporter Coffeezilla documented how the project unfolded. the game was never completed because the developers quit due to non-payment, Paul and his associates allegedly planned to engage in market manipulation, and players could not farm their hatched eggs or cash out.
Coffeezilla mentionted that two anonymous accounts received payments from the project — one received $364,000 (92.7697 ETH) and the other received $1 million (260,000 ETH). At the time of Coffeezilla’s report, CryptoZoo held approximately $79,875,629 or $1,214,225,001.8 ZOO for “CryptoZoo wildlife charities and development.
In now deleted answer videos, Paul accused another CryptoZoo developer of cheating him and the rest of the team, but later told Discord fans that he would “take responsibility.” He then he outlined a plan to repay the investors and end the game.
The class action lawsuit filed last year in the Western District of Texas alleges that Paul and other CryptoZoo associates promoted the project to “consumers unfamiliar with digital currency products” and that they “manipulated the digital currency market for Zoo Tokens to their advantage.”
In one answer and cross-claim filed Thursday, Paul claimed that Jake Greenbaum and Eduardo Ibanez, who worked on CryptoZoo and are also named in the class action lawsuit, were “crooks” who “sabotaged” the project. Paul also claimed that while he lost “hundreds of thousands of dollars due to the duplicity and deception of those he trusted,” Greenbaum and Ibanez pocketed “millions.”
CryptoZoo, however, is dead. Paul posted that after “personally” spending $400,000 to get it done early last year, its release was out of reach. He also reminded fans that the Zoo Token was created to support the game and was never intended as an “investment vehicle,” so the buyback is not intended to “compensate those who played in the crypto market and lost.”
“Unfortunately, there are too many regulatory hurdles that would need to be cleared that I didn’t understand at first and would ultimately delay this acquisition even further,” he said. “This buyback is a way for me to complete those who intended to play CryptoZoo.”
