Logan Paul's NFT zoo catastrophe takes an unexpected turn: He's buying back the eggs and suing his co-founders

SoftwareLogan Paul’s NFT zoo catastrophe takes an unexpected turn: He’s buying back the eggs and suing his co-foundersWhen you purchase through links on our site, we may earn an affiliate commission.Here’s how it works.

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(Image credit: Matt McNulty via Getty Images)

Logan Paul in a boxing ring.

One of the last things I did in 2023 was round-up the year’s crypto fails, during which I checked-in on an old favourite. In late 2021 mega-influencer Logan Paul, now probably best-known forthe PRIME energy drink rangeand his burgeoning WWE career, began promoting a blockchain project called CryptoZoo, a videogame where players would buyNFTeggs, hatch them into animals, breed them, trade them, and so on.

At the timePaul threatened to sue Coffeezillafor the word “scam” before backing down, apologizing, and several months later announcing he wouldbuy back the NFTs from CryptoZoo investors. I noted in the year’s roundup that things had since gone quiet and the buybackprobably wasn’t going to happen.

Well, I owe the WWE US Champion an apology. Logan Paulhas now announcedacross his social channels that “I am delivering on my promise to buy back Base Egg and Base Animal CryptoZoo NFTs for their original purchase price.” Let’s just take a moment to appreciate the faintly farcical phrase “egg buyback”.

In a lengthy post Paul claims “the best possible intentions” and that “I never made a single penny from the project, period.” He claims this buyback program involves $2.3 million of his own money, before going on to make some eyebrow-raising accusations about the project.

Paul has filed a counter-claim against two of his fellow defendants in an existing class action suit against CryptoZoo,and includes a link to the filing. He says the lawsuit is based on the above investigation as well as all internal communications and trading activity, and it takes aim specifically at two co-founders on the project, Eduardo Ibanez and Jake Greenbaum.

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Logan Paul at a boxing match.

“Wait until we successfully launch our eggs and I explain this fucking surgical maneuver we pulled off to remove the snake from the grass it is fucking legendary.“Logan Paul

“Wait until we successfully launch our eggs and I explain this fucking surgical maneuver we pulled off to remove the snake from the grass it is fucking legendary.”

Paul meet Greenbaum through an interest in Pokemon cards, and soon learned that this guy not only collected cards but nicknames: “because of his supposed expertise in [blockchain & NFT] areas, Mr. Greenbaum was known in other circles not as the Collectibles Guru, but as the ‘Crypto King.'”

The long-and-short of Paul’s argument is that he relied on Ibanez and Greenbaum to actually build CryptoZoo and deliver on the promises, while Paul’s role was mainly in “high level” ideas and promoting the thing. One striking example of the situation relates to CryptoZoo’s so-called liquidity pool (essentially a decentralised mini-exchange for trading specific types of crypto), which in the weeks leading up to the “Zoo Day” launch Paul seems to have no understanding of. Paul wrote to his fellow founders in May 2023: “Who’s in charge of the liquidity/token pool blah blah blah like idk how any of that shit works.”

The filing claims that Paul’s fellow founders kept trying to rush development “in order to take advantage of what they perceived as a thriving but mercurial NFT market—a market that Mr. Greenbaum at one point described as a ‘house of cards.'” Now that’s an NFT developer being honest about their NFT game.

Paul suspected Greenbaum especially and his distrust led to an internal rug pull: Paul launched a new ZOO Token that replaced the old one 1:1 and at the same time blacklisted wallets associated with Greenbaum. He resolved that Greenbaum needed to be removed from the project, and sent the following email to his fellow founders: “The game is beyond him. Wait until we successfully launch our eggs and I explain this fucking surgical maneuver we pulled off to remove the snake from the grass it is fucking legendary.”

But things elsewhere were going wrong. The game’s lead developer began trying to hold the code hostage and demanded $1 million for its return. Ibanez tells Paul the developer has “went rouge [sic]”. Perhaps Ibanez should have suspected this, however, as it turns out he had “inexplicably hired as his lead developer a rumored former felon who previously had been incarcerated for armed robbery and who, even before stealing the code, had been badmouthing Mr. Paul and the very project he was tasked with building in online forums.”

The CryptoZoo marketplace for animal and hybrid NFTs.(Image credit: CryptoZoo)

Animals on CryptoZoo

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“As far as the game itself, unfortunately it will not be released.“Logan Paul

“As far as the game itself, unfortunately it will not be released.”

Paul’s seeking compensatory damages, punitive damages, all his costs, and basically anything else he can get. Which is probably the point at which to emphasise that all the above is Paul’s version of events as fine-tuned through the lens of expensive lawyers. The filing casts Paul as a somewhat starry eyed victim of the scheme himself, and someone who attempted to do the right thing when he realised what was going on.

To return to the buyback scheme itself, there’s a limited timeframe alongside the usual legalese you’d expect which, conveniently enough, stops anyone claiming the buyback from taking part in the class action:

Those who bought base egg NFTs and base animal NFTs can now fill inthe claim form, which has to be done before February 8, 2024, after which all claims will be processed and those eligible will receive 0.1 ETH per eligible NFT (the current value of this is roughly $240). Due to a fall in the value of Ethereum this is a loss of just over a third in value from what people would have paid at the time, though it feels unfair to blame Paul for that. Curiously enough the Hybrid animal NFTs, which were kinda the point of the game-as-conceived, are not eligible for the buyback, with no reason given.

There’s clearly more entertainment to come from CryptoZoo yet, though not in the manner once intended: “As far as the game itself, unfortunately it will not be released,” says Paul. “This buy-back is a way for me to make whole those who intended to play CryptoZoo. The buy-back is not intended to compensate those who gambled on the crypto market and lost. It’s important to remember that the Zoo Token was created to support the CryptoZoo game and its players; it was ‘not intended as an investment vehicle,’ as outlined in the original WhitePaper.”

That’s a curious clarification at the end, isn’t it? Paul described CryptoZoo from the start as a “really fun game that makes you money”. All of these projects are sold on the promise of returns for doing nothing, and that’s why they attract victims. Ever the P.T. Barnum, Paul can’t resist trying to put a positive spin on this as “the first ever NFT buy-back”, but you wouldn’t be surprised if this menagerie of villains and animal jpgs has more wild firsts to come.

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