Cryptoking says he didn't respond to Logan Paul's courts summons because his lawyers said it would cost less to default

Logan Paul/Youtube Gorodenkoff/Adobe Stock Angelov/Adobe Stock

EXCLUSIVE: Crypto influencer explains why he intentionally ignored Logan Paul’s NFT lawsuit

Jake Greenbaum said if he participated in the court process he’d be subject to endless litigation.

 

Marlon Ettinger

Tech

A crypto influencer who Logan Paul blamed for the downfall of his NFT project CryptoZoo never responded to a lawsuit Paul filed against him because he said his lawyers told him it would be cheaper than going to court.

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Jake Greenbaum, known as the CryptoKing, told the Daily Dot that his lawyers told him the court battle could end up costing him in the millions and turn the case into an “ongoing issue.”

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Paul filed a cross-claim against Greenbaum and another man after he was sued in a Texas court for his involvement in an alleged NFT “rug-pull” scheme over the CryptoZoo project. 

The initial lawsuit named Paul, his personal assistant Danielle Strobel, his manager Jeffrey Levin, and three other men: Eduardo Ibanez, Greenbaum, and Ophir Bentov, as being responsible for the allegedly deceptive development of the uncompleted NFT game.

The game, which was launched in July 2021, allowed users to trade tokens representing animals who would then “mate” to produce mash-ups of imaginary animals and, in theory, increase in value. 

NFT mania and crypto meme coins were everywhere at the time, culminating the next year in celebrity cryptocurrency commercials during the Super Bowl. A bubble pop and a string of prosecutions against high-profile crypto-world figures followed.

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News about the project dried up until YouTuber Coffeezilla released a three-part documentary investigation in December 2022, documenting a series of broken promises over the course of the game’s development, as well millions of dollars of losses for investors.

After the series blew up, Paul put out a video saying he would sue Coffeezilla, before walking back the threat following backlash online.

Paul later announced that the game wouldn’t be completed.

A lawsuit filed in February 2023 by a Texas man (whose lawyer is Tom Kherker, a popular YouTubee known as Attorney Tom), accused Paul and his collaborators of defrauding his investors over the scheme (the lawsuit, which is ongoing, expanded to a class action after mediation attempts failed).

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Paul denied all the allegations in the lawsuit but announced a buyback program worth $2.3 million for some of the Base Egg and Base Animal Crytpozoo NFTs in January this year. Some commentators—including Coffeezilla and Attorney Tom—dismissed the buyback as a cynical attempt to get potential class victims to waive their rights.

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The same day Paul announced the buyback program, he filed the suit against Ibanez and Greenbaum, claiming they were responsible for hijacking the project, enriching themselves in the process.

Paul said that throughout the project he’d deferred to Greenbaum based on his alleged expertise in the crypto world.

According to Paul’s suit, Greenbaum and Ibanez manipulated the game’s internal market before the public had access to it, and passed inside information to outside investors so they could manipulate the token market and make a tidy profit.

“Logan is trying to shift blame for his conniving activities,” Greenbaum told the Daily Dot when the suit against him was filed, calling the allegations “completely false.”

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“He’s trying to defer blame, but all will come out in the court proceedings,” Greenbaum said, referring to text messages which he claimed would be shown in discovery “along with thousands of other damning messages.”

“Due to ongoing litigation I can’t comment more although I’d love to send 100s of txts to u so u see his character, lies, manipulation and possible fraud,” Greenbaum said in an Instagram DM.

He also provided a screenshot of a message he said was from Paul showing him confronting Paul over “unethical choices.”

“Logan u stole $40 mil $s in tokens from me, u stole from 248 other individuals. U are a scam artist, u are a liar, and U betrayed ur own community. U won’t take advice from more brilliant minds and like to play god when u aren’t. The reality is. U aren’t that guy. And every detail from this project is going to get exposed. Japan round 2 for the biggest moron I’ve ever had the pleasure of doing business,” Greenbaum wrote in the screenshot, referencing a video Paul uploaded in 2017 showing what looked like the body of a person who’d committed suicide he found in Japan’s Aokigahara forest.

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“Oh Jake trust me bro,” Logan replied according to the screenshot. “I am that guy.”

Greenbaum told the Daily Dot in January that Paul agreeing to returning stolen tokens to the community was proof Paul was responsible for the debacle.

“Why return stolen tokens if I was the ‘bad’ guy,” Greenbaum asked. “It’s because I never was, Logan always had been and didn’t want legal repercussions for the theft of millions.”

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But rather than contesting the charge, Greenbaum never answered the court at all.

The court entered a default judgment against Greenbaum on Sunday, June 16, recognizing that he wasn’t going to respond and finding in favor of Paul’s lawsuit. 

Paul’s lawyers explained how they’d tried multiple methods to get in touch with Greenbaum, including by serving Greenbaum with a complaint over email and through an X DM. But according to the lawyers, all they got from that method was a block

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According to Greenbaum, that’s because his lawyers told him that fighting the lawsuit would be more expensive than if he just took the default judgment.

“The [R-word] child had blocked me for a year +,” Greenbaum told the Daily Dot, sharing a screenshot from X showing that Paul had blocked him. (Paul’s lawyers mentioned in their filing that serving Greenbaum over X would be “futile” because he’d blocked the account used to serve him, though they make no mention of it being Paul’s account.)

“But my attorneys guidance was Logan is a very wealthy individual chasing attention and can file 100 counter claims and law suits the minute u respond,” Greenbaum explained. “If u default he can’t collect anything from u because u don’t have cars/houses. if u respond it’ll be 6-7 figures in legal and an ongoing case.”

In a court filing in response to the default, Paul’s lawyers asked for a 90-day discovery period to help determine damages, which could include the money Paul invested into the project as well as “significant monetary damages and reputational harm,” and legal fees. 

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Paul’s lawyers didn’t answer questions about Greenbaum not responding to the lawsuit.

“We have no comment on behalf of Mr. Paul,” Jeffrey Neiman, one of Paul’s lawyers, said in an email to the Daily Dot.


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