Logan Paul Scores Legal Win as Judge Greenlights Motion to Dismiss CryptoZoo Lawsuit

In a twist that surprised exactly no one in crypto's wild west, a judge just handed Logan Paul a victory in the CryptoZoo class-action saga.

Courtroom Coup: Paul Dodges Legal Bullet

The YouTube star-turned-crypto-pitchman successfully argued for dismissal of claims he defrauded investors in the ill-fated NFT game project. While the ruling doesn't absolve him of all liability, it significantly narrows the battlefield.

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Plaintiffs' lawyers now face an uphill climb after the judge gutted their core arguments. Meanwhile, Paul's team pops champagne - or more likely, Prime energy drinks.

Another day, another crypto project facing heat while its celebrity backer walks away relatively unscathed. At least this time they waited until after the ATH to pull the rug.

Commodity Pool Fraud Claim Tossed

In his 75-page report, Griffin concluded that one of the group’s 27 claims, alleging Paul engaged in commodity pool fraud, should be dismissed permanently.

Plaintiffs had argued that CryptoZoo NFTs functioned like option contracts, since buyers initially purchased “egg” NFTs that later “hatched” into animals which could be bred into hybrids.

“The mental gymnastics required to come to this conclusion are truly dizzying,” Griffin wrote. He added that plaintiffs failed to show how such purchases amounted to option contracts or contracts for future delivery.

The judge did, however, recommend that the plaintiffs be given an opportunity to amend the remaining 26 claims, which span fraud, unjust enrichment, negligence, breach of contract, and violations of state consumer laws.

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

He noted that much of the complaint relied on “fragments of facts” and vague attributions to “Defendants” rather than demonstrating Paul’s direct involvement or personal gain.

“In some instances, plaintiffs attempt to jam together two pieces of different puzzles in the vain hope of producing a final, cohesive product,” Griffin wrote, emphasizing that legal precedent does not support such tactics.

The lawsuit also names CryptoZoo co-founders Eduardo Ibanez and Jake Greenbaum. Paul has maintained that the pair misled him, leading to the project’s collapse, a claim the court previously signaled it was unlikely to accept.

In January 2023, Paul pledged to reimburse buyers, setting aside $2.3 million for refunds.

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

Meanwhile, Paul has filed a defamation lawsuit against YouTuber Stephen Findeisen, known as Coffeezilla. Paul argues that Findeisen’s reports on CryptoZoo falsely portrayed him as defrauding his audience.

Logan Paul says me interviewing people who lost money in CryptoZoo is "milking the shit out of it", and if I continue to do so and call this a scam: it's going to be worse for me in his lawsuit. pic.twitter.com/quDUrd4ELm

The lawsuit, filed on June 27 in a San Antonio, Texas District Court, stems from videos Findeisen produced about Paul’s failed CryptoZoo non-fungible token (NFT) project in 2022.

The lawsuit alleges that Findeisen “maliciously and repeatedly published false statements accusing Paul of operating a scam in connection with a troubled blockchain project called CryptoZoo.”

Paul seeks to hold Findeisen accountable for his actions and the significant damage caused to his reputation through the intentional spread of defamatory falsehoods, as stated in the court filing.