Texas Judge Dismisses Logan Paul's CryptoZoo Lawsuit, But Allows Updates

A federal magistrate in Texas has recommended dismissal of YouTuber Logan Paul from a proposed class-action lawsuit concerning the failed NFT venture CryptoZoo, though the judge is granting plaintiffs an opportunity to revise most of their claims.

On Thursday, Magistrate Judge Ronald Griffin advised the Austin federal court that the current legal arguments brought by the class-action group failed to adequately link Paul to alleged financial losses suffered by CryptoZoo investors.

This recommendation could lead to the court dismissing the case against Paul unless plaintiffs submit an amended complaint that addresses the shortcomings.

The suit—filed by buyers of CryptoZoo NFTs who allege the project was a “rug pull” that failed to deliver promised benefits—originally targeted Paul and other alleged associates in February 2023.

Despite the decision, the judge will permit all but one of the group’s 27 claims to be revised. The sole exception, a claim accusing Paul of commodity pool fraud, has been recommended for permanent dismissal.

Allegations Built On Strawman Reasonings

Judge Griffin found the plaintiffs’ arguments for this particular claim unsupported, stating, “The mental gymnastics required to come to this conclusion are truly dizzying.”

In his detailed 75-page report, Judge Griffin noted that the plaintiffs had not shown how buying CryptoZoo NFTs—digital “eggs” that could “hatch” into animals and be combined to create hybrid NFTs—constituted an options contract or a contract for future delivery, as required to support a commodity pool fraud claim.

Central to Griffin's recommendation was the lack of evidence tying Paul personally to CryptoZoo's downfall.

He noted that many of the claims relied on fragments of facts and vague attribution to Paul rather than showing his direct involvement or how he could have personally gained from the project collapse.

The lawsuit brought claims of fraud, unjust enrichment, negligence, breach of contract, fraud conspriacy, aiding and abetting fraud and breaches of consumer law in multiple states, among others.

The CryptoZoo class-action lawsuit also involved co-founders Eduardo Ibanez and Jake Greenbaum.

Paul has stated in previous communications that he, too, was a victim of deception regarding the project, a claim the court had previously signaled it was unlikely to accept.

Notably, Paul had pledged to reimburse its buyers, setting aside $2.3 million early this year to refund CryptoZoo buyers.

Claimants were compensated 0.1 ETH, roughly the original mint price of a cryptoZoo NFT in 2021, provided they agreed not to pursue legal actions.

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Logan Paul Takes Legal Action Against Coffeezilla Over CryptoZoo Coverage

Logan Paul has initiated a defamation lawsuit against YouTuber Stephen Findeisen, widely known as Coffeezilla.

Paul contends that Findeisen’s coverage of CryptoZoo wrongly depicted him as defrauding his audience.

Filed on June 27 in a San Antonio, Texas District Court, the suit targets videos Findeisen released in 2022 about Paul’s failed CryptoZoo NFT project.

According to the complaint, Findeisen “maliciously and repeatedly published false statements asserting that Paul ran a scam linked to the troubled blockchain venture, CryptoZoo.”

Paul is seeking to hold Findeisen responsible for the alleged damage to his reputation, claiming the YouTuber knowingly spread defamatory misinformation that harmed him personally and professionally.