Judge Advises Against Logan Paul's Motion in CryptoZoo Lawsuit
According to Cointelegraph, a U.S. judge has recommended that YouTuber Logan Paul should not be permitted to shift blame onto the co-creators of his failed crypto project, CryptoZoo, in an ongoing lawsuit. Magistrate Judge Ronald Griffin, on Tuesday, advised a federal court in Austin, Texas, to reject Paul's request for a default judgment against CryptoZoo co-founders Eduardo Ibanez and Jake Greenbaum. This lawsuit was initiated by buyers of CryptoZoo non-fungible tokens (NFTs) who allege the project was fraudulent.
Judge Griffin expressed concerns that granting Paul's request, which seeks a ruling against Ibanez and Greenbaum without a trial due to their lack of response, could lead to inconsistent judgments. The lawsuit, filed by a group of CryptoZoo NFT buyers in early 2023, accuses Paul, Ibanez, Greenbaum, and others involved in the project of orchestrating a "rug pull" and failing to deliver promised benefits. In response, Paul filed a counterclaim against Ibanez and Greenbaum in January 2024, asserting that he had hired them to manage the project, but they deceived him, leading to CryptoZoo's downfall.
CryptoZoo, launched in 2021, involved players purchasing NFT "eggs" that could "hatch" into animals, which could then be bred to create hybrid animals for trading tokens. Despite featuring NFTs and a token, the anticipated blockchain-based game never materialized. Judge Griffin warned that if Paul's motion were approved, the lawsuit might falter, as Ibanez and Greenbaum have not appeared in court. He emphasized that the case fundamentally requires the court to assess whether the defendants collectively engaged in fraudulent activities in promoting and operating CryptoZoo.
Judge Griffin further noted that if the court were to grant a default judgment, attributing all blame to Ibanez and Greenbaum, it would undermine the plaintiffs' claims against Paul and other defendants. Although Paul's motion targets only his co-founders, not the allegations from CryptoZoo buyers, Judge Griffin stated that Paul has not demonstrated a reduced risk of inconsistent judgments. The court believes the defendants are similarly situated, possess closely related defenses, and face joint liability charges from the plaintiffs. Most importantly, ruling on Paul's motion at this time would undoubtedly result in inconsistent judgments.
In a separate legal battle, Logan Paul sued YouTuber Stephen Findeisen, known as "Coffeezilla," in June 2024, alleging defamation regarding CryptoZoo in a series of videos. A judge allowed this complaint to proceed in March, while Findeisen has requested the case be consolidated with the lawsuit against Paul by CryptoZoo NFT buyers, a move Paul opposes. In January 2023, Paul pledged to devise a plan for CryptoZoo and later allocated $2.3 million for refunds to CryptoZoo buyers, contingent upon claimants agreeing not to pursue legal action over the project. Paul refunded buyers 0.1 Ether (ETH), equivalent to the original sale price of CryptoZoo tokens in 2021.
