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A Texas magistrate judge has advised against Logan Paul’s attempt to shift blame onto CryptoZoo co-founders amid ongoing litigation over the failed NFT project.
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The judge emphasized the risk of inconsistent judgments if Paul’s motion for default judgment against Eduardo Ibanez and Jake Greenbaum is granted, highlighting the complexity of joint liability in the case.
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According to COINOTAG sources, Magistrate Judge Ronald Griffin stressed that ruling in Paul’s favor without a trial would undermine the integrity of the lawsuit brought by CryptoZoo NFT buyers alleging fraud.
Texas judge warns against Logan Paul’s bid to blame CryptoZoo co-founders, citing risks of inconsistent rulings in NFT fraud lawsuit.
Judge Warns of Legal Risks in Logan Paul’s Attempt to Shift CryptoZoo Blame
Magistrate Judge Ronald Griffin’s recent recommendation to deny Logan Paul’s motion for default judgment against CryptoZoo co-founders Eduardo Ibanez and Jake Greenbaum underscores the legal intricacies surrounding the NFT project’s collapse. Paul’s motion sought to hold his co-founders solely responsible for the failure of CryptoZoo, a blockchain-based NFT game that promised users the ability to hatch and breed digital animals. However, Judge Griffin highlighted that granting such a motion could lead to inconsistent judgments within the same lawsuit, as all defendants are accused of joint liability by the plaintiffs.
The judge’s stance reflects a broader judicial caution against fragmenting responsibility in complex fraud cases, especially when multiple parties are involved in the promotion and operation of a project. Griffin noted that the court must determine whether the defendants collectively engaged in fraudulent conduct, making it premature to isolate blame on Ibanez and Greenbaum without a full trial. This decision maintains the integrity of the legal process and ensures that all parties receive a fair hearing.
Implications for CryptoZoo NFT Buyers and Ongoing Litigation
The lawsuit initiated by CryptoZoo NFT buyers in early 2023 alleges that the project was a “rug pull,” with promised features and benefits never materializing. Paul’s counterclaim against his co-founders, filed in January 2024, accused them of deceiving him and contributing to the project’s downfall. Judge Griffin’s recommendation to deny Paul’s motion preserves the plaintiffs’ ability to pursue claims against all involved parties, including Paul himself.
This legal development is significant for NFT investors seeking accountability, as it prevents the dismissal of key defendants without due process. It also signals that courts are scrutinizing claims of fraud in the burgeoning NFT space with rigor, ensuring that all allegations are thoroughly examined before judgments are rendered.
Parallel Legal Battle: Logan Paul vs. YouTuber Coffeezilla
In a related legal matter, Logan Paul is engaged in a defamation lawsuit against YouTuber Stephen Findeisen, known as “Coffeezilla,” who produced critical content about CryptoZoo. The lawsuit, filed in June 2024, alleges that Findeisen’s videos contained defamatory statements damaging Paul’s reputation. A judge allowed the case to proceed in March, and Findeisen has requested that this defamation suit be consolidated with the CryptoZoo NFT buyers’ lawsuit, a move opposed by Paul.
This parallel litigation highlights the broader reputational and legal challenges faced by public figures involved in high-profile crypto projects. It also illustrates the intersection of social media influence and legal accountability within the crypto ecosystem.
Refund Efforts and Buyer Compensation in CryptoZoo Fallout
Following mounting criticism and legal pressure, Logan Paul announced a refund plan in January 2023, setting aside approximately $2.3 million to compensate CryptoZoo NFT buyers. The refunds, amounting to 0.1 Ether per claimant—the original purchase price—were contingent on buyers agreeing not to pursue further legal action. While this move provided some restitution, it did not resolve the underlying allegations of fraud and mismanagement.
The refund initiative reflects a growing trend among NFT projects to address investor grievances proactively, although such measures often come after significant reputational damage has occurred. For CryptoZoo buyers, the refunds represent partial relief but do not preclude ongoing legal claims seeking broader accountability.
Conclusion
Magistrate Judge Griffin’s recommendation to reject Logan Paul’s attempt to isolate blame on CryptoZoo co-founders reinforces the complexity of fraud litigation in the NFT sector. By emphasizing the risk of inconsistent judgments and the necessity of joint liability consideration, the court ensures a comprehensive examination of all defendants’ roles. Meanwhile, parallel lawsuits and refund efforts illustrate the multifaceted challenges faced by stakeholders in high-profile crypto projects. As the legal process unfolds, this case serves as a critical precedent for accountability and investor protection in the evolving digital asset landscape.
