Logan Paul

Kathy Hutchins/Shutterstock

Logan Paul fails to reach mediation deal in CryptoZoo scam suit despite claiming he would settle

The mediation cost at least $25,000, but went nowhere


Marlon Ettinger


Posted on Oct 31, 2023   Updated on Oct 31, 2023, 5:02 pm CDT

In August, YouTuber Logan Paul and four other defendants went to mediation over a civil lawsuit containing allegations that Paul’s CryptoZoo project was an NFT “rug-pull” scheme designed to defraud investors.

Now, according to an Oct. 25 filing in the Austin, Texas court where the suit is playing out, that mediation has failed. A new filing revealed the parties tried to settle during an Oct. 4 with Randy Wulff, Esq. 

According to Wulff’s 2023 fee schedule, a daily rate for a mediation session costs $25,000. Wulff didn’t respond to an email about who foots the bill for the session.

Despite the big charge, “the parties were unable to resolve this matter,” wrote lawyers for both sides in the filing.

The lawsuit was filed against Paul and his co-defendants at the beginning of February this year. It named him, his personal assistant Danielle Strobel, his manager Jeffrey Levin, and three other men: Jake Greenbaum aka Crypto King, Eduardo Ibanez, and Ophir Bentov aka Ben Roth, who were involved in the allegedly deceptive development of CryptoZoo, an uncompleted 2021 NFT game project.

Ibanez, Strobel, Levin, Paul, and Greenbaum were named as founders of the project in the complaint. Bentov was a community manager for the game, and Ibanex was the lead developer on the project.

“Defendants promoted CryptoZoo Inc.’s products using Mr. Paul’s online platforms to consumers unfamiliar with digital currency products,” charged the complaint, resulting in “tens of thousands of people purchasing said products.”

Furthermore, the complaint alleged, the developers pulled out of the project suddenly after promoting it to their fans and kept the money without any intention of completing the project: a classic “rug pull.”

Rug pulls are the quintessential cryptocurrency scam, wrote Chainanalysis in 2021. The perpetrators promote what seem to be legitimate projects as the price of the token rises, then pull out at the height of the frenzy before the scheme collapses. According to Paul and his associates, CryptoZoo couldn’t have been a rug-pull because they never sold their NFTs.

After a three-part documentary series by the YouTuber Coffeezilla in December last year where he detailed the numerous broken promises in the development of the game, Paul threatened his own legal action against the YouTuber before quickly pulling back.

 Instead, he offered to pay back investors to the tune of $1.8 million.

When he never did pay up, investors like the man in the current case took action, attempting to bring a class action case against the developers.

According to the American Bar Association, 70-80% of cases that go through mediation end in agreement and have high rates of compliance.

Now with Logan Paul joining that select 20-30%, he and his co-defendants might have to settle the case the old-fashioned way: in court.

We crawl the web so you don’t have to.
Sign up for the Daily Dot newsletter to get the best and worst of the internet in your inbox every day.
Share this article
*First Published: Oct 31, 2023, 5:01 pm CDT