Nazia Saeed
- Magistrate Judge Ronald Griffin rejects Logan Paul’s attempt to blame CryptoZoo co-founders for the project’s failure
- Judge Griffin advises the court to deny Paul’s request for a default judgment against Eduardo Ibanez and Jake Greenbaum
- CryptoZoo NFT buyers, who filed the lawsuit, still seek compensation after the project failed to deliver on promises
Logan Paul, the YouTube star, cannot shift the blame for the collapse of his CryptoZoo project onto its co-founders, according to Magistrate Judge Ronald Griffin. The judge, in a ruling on Tuesday, advised the federal court in Austin, Texas, to deny Paul’s request for a default judgment against Eduardo Ibanez and Jake Greenbaum, the co-founders of CryptoZoo, in a lawsuit filed by CryptoZoo NFT buyers.
Court ruling could impact CryptoZoo lawsuit outcome
Judge Griffin explained that allowing Paul’s request to dismiss the case without a trial would lead to “inconsistent judgments”. The lawsuit, filed by CryptoZoo NFT buyers in early 2023, accused the project of being a “rug pull” and failing to deliver on promised perks. The NFT buyers sought damages, claiming they were defrauded by the project’s creators, including Paul, Ibanez, and Greenbaum.
Paul, who had counterclaimed against the co-founders in January 2024, alleged that he hired them to run the project but was deceived by them, causing the failure of CryptoZoo. The project, which launched in 2021, featured NFTs and a token, but the promised blockchain-based game was never released.
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Potential consequences for Paul’s defense strategy
The judge pointed out that granting Paul’s motion and assigning full blame to the co-founders could cause the lawsuit to falter, as the duo had not yet appeared in court. Judge Griffin highlighted the need for the court to determine whether all defendants, including Paul and the co-founders, were involved in fraudulent actions related to the project.
He emphasized that ruling on Paul’s motion at this point would risk inconsistent judgments, as the NFT buyers also have claims against him and other defendants. According to the judge, the defendants share similar defenses, making it essential to address all claims together rather than dismissing one set of defendants prematurely.
Paul faces ongoing legal battles
Apart from the CryptoZoo case, Paul is also embroiled in a separate legal dispute. In June 2024, he filed a lawsuit against YouTuber Stephen Findeisen (aka Coffeezilla), claiming defamation over Findeisen’s videos criticizing CryptoZoo. Despite Paul’s objections, Findeisen has requested the cases be combined.
Meanwhile, in January 2023, Paul promised to develop a plan to address the CryptoZoo issue and later set aside $2.3 million for refunds to CryptoZoo buyers who agreed not to sue over the project. He refunded buyers with 0.1 ETH (the original price of the CryptoZoo tokens in 2021).
Logan Paul’s battle with CryptoZoo co-founders and NFT buyers remains ongoing. The court’s rejection of his attempt to blame the co-founders could shift the focus back to the larger claims of fraud and deception. The final outcome of this case could have significant implications not only for Paul but also for the broader NFT and crypto project ecosystem, setting precedents for how accountability is handled in the emerging digital asset space.
