Logan Paul Launches CryptoZoo NFT ‘Buyback,’ Files Countersuit As Legal Battles Rage On

It’s been nearly three years since YouTuber-turned-wrestler Logan Paul first announced his CryptoZoo NFT game, which famously never materialized.

Now, one year after promising NFT buyers that he’d refund them, Paul has launched a non-secure website for CryptoZoo NFT refunds—and announced a countersuit against two of the now-defunct crypto gaming project’s co-creators, alleging “nefarious trading activity.” 

Related articles

DraftKings Exits NFT Business Due to Legal Issues

30 July 2024

BlockDAG’s Leadership Unveil – Crypto Market Titans Behind Game Changing Presale Challenge VeChain and Optimism’s Growth

30 July 2024

According to a tweet from Paul published Thursday, traders who bought “Base Egg” and “Base Animal” CryptoZoo NFTs can file refund claims today until February 8. Paul said he is allocating $2.3 million toward the NFT refunds.

The refunds

“This buy-back is a way for me to make whole those who intended to play CryptoZoo,” Paul said. “The buy-back is not intended to compensate those who gambled on the crypto market and lost. It’s important to remember that the Zoo Token was created to support the CryptoZoo game and its players.”

Paul’s latest statement suggests that there will be no refunds for anyone who bought the CryptoZoo game’s associated Ethereum-based token, ZOO, which has long since plummeted to zero. Only NFT buyers will be able to see a fraction of their spent funds returned.

But if a quick glance at the “CryptoZoo Victims” Discord server is any indication, many of those who bought into Paul’s project are not happy about the proposed resolution.

“Didn’t like it back then when it was announced and don’t like it now,” wrote one purported victim on Paul’s reimbursement proposal. 

Notably, the buyback site does not support HTTPS, an important web security feature that offers site encryption and verification and has existed since 1994 and been commonplace for at least a decade. Instead, Paul’s site directs to a form that requires personal data collection including names, phone numbers, crypto wallet addresses, and physical addresses in order to be considered for the buyback. 

The countersuit

“CryptoZoo was derailed by bad actors,” Paul claimed in his post. “Bad actors who DID steal money and who betrayed our team while internally sabotaging the game.”

ADVERTISEMENT

Paul claimed that an “extensive investigation” was conducted over the CryptoZoo fiasco that involved both a blockchain examination and internal document review. This has led him to file a crossclaim lawsuit Thursday against Eduardo “Eddie” Ibanez and Jake “CryptoKing” Greenbaum, who both participated in the failed project.

In February 2023, one trader who bought into the CryptoZoo project filed a lawsuit against Paul, Ibanez, Greenbaum, and two other CryptoZoo affiliates as part of a class-action legal effort to seek compensation for the alleged “rug pull” CryptoZoo scam. 

After initially trying to claim a lack of jurisdiction last year—and then failing to mediate a resolution—Paul is now attempting to reassign blame by denying the allegations and instead pointing the finger at Ibanez and Greenbaum.

“Nefarious trading activity [took place] behind our backs, without our knowledge, and with the intention of defrauding us all,” Paul said of his counterclaim against Ibanez and Greenbaum.

Paul’s suit claims that his role in the project was primarily to market and promote it, though he did make some creative game development decisions, while Greenbaum was responsible for the tokenomics of ZOO and Ibanez for the game’s development.

According to the legal response Paul made public, he denied allegations of fraud, breach of contract, implied breach of contract, unjust enrichment, negligence, fraudulent misrepresentation, conspiracy to commit fraud, damages, and to pay for attorney fees for the case, among other charges and requests. 

The secret sales

Paul alleged that Greenbaum created a liquidity pool in “secrecy” for the ZOO token where CryptoZoo founders were able to swap ZOO for Binance’s BNB token—but ZOO’s market cap suddenly dumped from $130 million to $26 million as unidentified wallets cashed out.

“Idk how any of that shit works,” Paul reportedly said in May 2023 of the ZOO liquidity pool.

Greenbaum blamed the market cap plunge on “bots,” according to the suit, and Ibanez allegedly suggested a strategy to manipulate the future price of ZOO. Paul then proposed the founders lock up their tokens, but it seemed that damage had been done.

Paul further alleged that Ibanez repeatedly made false promises about the game’s development, lied about his credentials, and gained roughly $38,000 by front-running Paul’s ZOO announcements with timed trades and sold off billions more ZOO, making an estimated $1.7 million in total, per the filing.

“I cannot comment beyond the allegations are completely false,” Greenbaum told Decrypt.

The dead game

“I was highly disappointed that the game was not delivered,” Paul said on Twitter of CryptoZoo, when he had assured fans it would still be finished just last year. 

It’s worth noting, though, that shortly after Paul’s initial refund promise in early 2023, a solo indie developer made and shipped their own working version of CryptoZoo in just a “few hours”—just without the whole crypto part.

But Paul won’t be finishing his game—and is trying to wash his hands of the whole ordeal.

“I personally spent $400,000 to have it developed and after its completion in early 2023 and some further diligence, unfortunately, there are too many regulatory hurdles that would need to be cleared that I did not originally understand and would ultimately delay this buy-back even further,” Paul claimed.

According to former CryptoZoo developer Zach Kelling—who worked under Ibanez—Kelling, Kelling’s girlfriend, Paul’s manager Jeff Levin, and Ibanez all lived together at one point. Kelling previously told Decrypt that he and his hired team of engineers were never fully paid for their work on the game, and thus stopped work on the project.

Decrypt has reached out to Kelling for an updated comment and has sought to contact Ibanez and Greenbaum as well.

This article has been updated to include a comment from Greenbaum. Edited by Ryan Ozawa.