CryptoZoo Fraud Lawsuit: Logan Paul Blames Partners for Rug Pull

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The CryptoZoo rug pull has thrust YouTube star Logan Paul into a legal storm, with a high-profile CryptoZoo lawsuit accusing him and his team of orchestrating an NFT scam. Launched in 2021 as a blockchain-based game promising players rewards through NFT purchases and Zoo Tokens, CryptoZoo raised millions but never delivered a functional game. Investors, left with worthless assets, filed a class-action lawsuit in 2023, labeling it a blockchain game scam. In a dramatic twist, Paul claims he was misled by business partners Eduardo Ibanez and Jake Greenbaum, who he alleges derailed the project. Was Logan Paul a victim of deception, or a key player in the CryptoZoo rug pull?

Logan Paul’s Defense: Pointing Fingers at Partners

Logan Paul has shifted blame for the CryptoZoo rug pull to his co-founders, Eduardo Ibanez and Jake Greenbaum. In his legal defense, Paul asserts that these partners mismanaged funds, failed to deliver on promised game development, and misrepresented the project’s progress. He argues the CryptoZoo rug pull stemmed from their actions, not his intent to deceive investors. In January 2024, Paul sought a default judgment against Ibanez and Greenbaum, who failed to respond in court. However, a Texas magistrate judge rejected this move in July 2025, warning that isolating blame could lead to inconsistent rulings, as all defendants share joint liability in the fraud allegations. Paul’s attempt to distance himself highlights the complexities of accountability in influencer-backed crypto ventures.

The CryptoZoo Lawsuit: A Timeline of Deception

The CryptoZoo lawsuit, filed in February 2023 by investor Don Holland and others in the U.S. District Court for the Western District of Texas, paints a grim picture of a blockchain game scam. The plaintiffs allege that Paul and his team falsely marketed CryptoZoo as a revolutionary play-to-earn game, enticing thousands to purchase NFTs and Zoo Tokens with promises of rewards, exclusive assets, and a thriving ecosystem. Instead, the project was abandoned, with funds allegedly transferred to wallets controlled by the defendants. The lawsuit brands this a classic NFT scam, accusing the team of executing a CryptoZoo rug pull that left investors with losses estimated in the millions. Paul’s counterclaim insists he was also defrauded, emphasizing his inexperience rather than malicious intent. Despite his $2.3 million refund program launched in 2024, which required claimants to waive their right to sue, legal battles persist.

Also Read: Spot the Rug Pull Red Flags: How to Identify a Rug Pull Like a Pro

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Final Thoughts: Lessons from the CryptoZoo Fallout

The CryptoZoo rug pull underscores the risks of celebrity-endorsed crypto projects, where hype often overshadows substance. The fraud allegations against Logan Paul and his team highlight a broader issue: the lack of transparency in NFT and blockchain game ventures. As the CryptoZoo lawsuit unfolds, it may set a precedent for influencer accountability in the Web3 space. Investors burned by the blockchain game scam are a stark reminder that due diligence is critical—celebrity backing doesn’t guarantee success. With regulators increasingly focused on crypto fraud, the future of influencer-led projects hangs in the balance. Will the CryptoZoo rug pull redefine accountability in the crypto space?

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