US Judge Denies Logan Paul’s Attempt to Shift Blame in CryptoZoo Lawsuit
A federal magistrate judge in Texas has denied internet celebrity Logan Paul’s request to avoid a lawsuit concerning his defunct cryptocurrency project, CryptoZoo, by attempting to implicate its co-founders. Magistrate Judge Ronald Griffin on [Date: Tuesday, value clarifying based on context if needed – *Tuesday is relative to publication date in original*] urged the court to deny Paul’s motion for a default judgment concerning a class-action lawsuit initiated by CryptoZoo non-fungible token (NFT) purchasers.
Inconsistent Judgments Risk
Judge Griffin stated that granting Paul’s bid would result in “inconsistent judgments” a “threatening specter.” This request would have allowed a ruling against co-founders Eduardo Ibanez and Jake Greenbaum without their participation in the trial, as they failed to respond within the stipulated timeframe.
“At its core, this case calls on the Court to determine whether Defendants together committed some form of fraudulent acts in the promotion and operation of CryptoZoo,” the judge emphasized. Granting Paul’s motion, he added, would undermine the plaintiffs’ ability to seek clarification against Paul himself.
Fraudulent NFT Project Lawsuit
In February 2023, a group of CryptoZoo NFT holders filed the initial lawsuit against Paul, Ibanez, Greenbaum, and other project associates. They alleged the project was a “rug pull” scam, entailing promises that were unfulfilled. The project’s core was an NFT “egg” marketplace designed to hatch into tradable animal NFTs, with plans for in-game breeding and a corresponding cryptocurrency token.
CryptoZoo was established in 2021 but never launched its promised blockchain-based game. Paul later facilitated a partial refund settlement, allocating $2.3 million specifically for refunds (equivalent to the original token purchase price, 0.1 ETH), contingent on claimants waiving further legal action related to the project itself.
Paul’s Counterclaim
In January 2024, Paul filed a counterclaim against Ibanez and Greenbaum. He asserted that he hired them as partners but contends they defrauded him after the project’s failure. Denying this bid, Judge Griffin noted Paul has not adequately demonstrated that allowing a default judgment against the co-founders would not itself cause inconsistencies in liability for other defendants, including his broader counterclaim obligations.
Broader Legal Battle
Pending before another Texas court is Paul’s separate lawsuit against another popular YouTuber, “Coffeezilla” Stephen Findeisen. Paul claims Findeisen published defamatory statements about CryptoZoo in a series of online videos. A judge permitted this claim to proceed, but Findeisen has petitioned for his case to be consolidated with the primary CryptoZoo NFT lawsuit, which Paul has opposed.
This ruling underscores the legal tension following the collapse of a high-profile celebrity crypto venture, where multiple parties face scrutiny over responsibility and the potential complications of attempting to apportion fault swiftly without a full adjudication.
