A police officer from Texas says he invested $3,000 in the project — but the game "did not work and never existed."
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Logan Paul is being sued by an aggrieved CryptoZoo investor.
The influencer has been accused of orchestrating a "rug pull" — and his assistant, manager and the project's lead developer are also named in the class action lawsuit.
Don Holland, a police officer from Texas, alleges in court filings that he purchased digital currency from CryptoZoo — and claims Paul's platforms were used to promote crypto products to thousands of consumers who were unfamiliar with how they worked. The document adds:
"Unbeknownst to the customers, the game did not work or never existed, and defendants manipulated the digital currency market for Zoo tokens to their advantage."
It's claimed that, once customer funds were obtained, developers abruptly abandoned the project and failed to deliver the promised benefits — and did not deliver a refund.
The court filing also mentions Paul's proposals to make things right for CryptoZoo investors — a video that was triggered by a three-part investigation into the project performed by a YouTuber called CoffeeZilla.
Discord messages written by Paul feature in the document, including one where he pleaded with the community to "not put any more money in CryptoZoo" — adding:
"I will no longer be the scapegoat for anyone's financial decisions."
Holland says he is seeking "past and future compensation" for the "fraudulent actions" of Paul and his team — and claims he invested a total of $3,000 in the project.
It's alleged that Holland "realized his money was likely lost" when Logan Paul announced a different NFT project and started "ignoring" ZOO.
And the court filings claim Paul and his team "made the business decision to forego an expensive and time-consuming process to create a functional CryptoZoo game or support it, and instead deliberately undertook a scheme to defraud the plaintiff and other consumers."
The counts in the lawsuit include fraud, breach of contract, unjust enrichment, and a violation of the Texas Deceptive Trade Practices Act — as well as negligence and fraudulent misrepresentation.
Last month, Paul unveiled a "three-step plan" designed to compensate CryptoZoo investors, but critics have claimed that it doesn't go far enough.
The 27-year-old said that he is personally committing 1,000 ETH (about $1.3 million at the time) to ensure gamers could burn in-game assets and receive the original mint price of 0.1 ETH back.
But given how the value of ETH has fallen markedly since November 2021, this will now be worth a lot less in cash terms.