{"id":107797,"date":"2025-12-25T17:33:09","date_gmt":"2025-12-25T17:33:09","guid":{"rendered":"https:\/\/mailinvest.blog\/index.php\/2025\/12\/25\/california-crypto-firm-accused-of-inflating-katy-perry-nfts-and-fraud\/"},"modified":"2025-12-25T17:34:13","modified_gmt":"2025-12-25T17:34:13","slug":"california-crypto-firm-accused-of-inflating-katy-perry-nfts-and-fraud","status":"publish","type":"post","link":"https:\/\/mailinvest.blog\/index.php\/2025\/12\/25\/california-crypto-firm-accused-of-inflating-katy-perry-nfts-and-fraud\/","title":{"rendered":"California crypto firm accused of inflating Katy Perry NFTs and fraud"},"content":{"rendered":"

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4 years in the past, California startup Theta Labs\u2019 cryptocurrency was hovering, and its future appeared vivid when it landed a partnership with pop star Katy Perry. <\/p>\n

The Bay Space firm had constructed a market for digital collectibles generally known as nonfungible tokens, or NFTs, and had teamed up with Perry to launch NFTs tied to her Las Vegas live performance residency. Its THETA token jumped by greater than 500% in early 2021, reaching a peak of greater than $15, making it one of many world\u2019s most beneficial cryptocurrencies. Later within the yr, the highlight shone on the corporate when it introduced the Perry partnership. <\/p>\n

\u201cI can\u2019t wait to dive in with the Theta group on all of the thrilling and memorable artistic items, so my followers can personal a particular second of my residency,\u201d Perry mentioned in a June 2021 information launch. <\/p>\n

Right this moment, like many cryptocurrencies, THETA is 95% off its 2021 peak. It took successful this week after former executives accused it of manipulating markets to dupe shoppers into shopping for its merchandise. On Tuesday, it was buying and selling at lower than 30 cents.<\/p>\n

Two former executives from Theta Labs sued the startup, alleging in separate lawsuits that the corporate and its chief government, Mitch Liu, engaged in fraud and manipulated the cryptocurrency marketplace for his profit. Liu retaliated towards them after the workers refused to interact in misleading enterprise practices and raised considerations, the lawsuits say.<\/p>\n

A number of the alleged misconduct concerned inserting faux bids on Perry\u2019s NFTs, participating in token \u201cpump and dump\u201d schemes and utilizing movie star endorsements and \u201cdeceptive\u201d partnerships with high-profile corporations akin to Google to deceive the general public, based on the December lawsuits filed in Los Angeles Superior Court docket.<\/p>\n

Perry just isn’t accused of any wrongdoing within the go well with, and Theta denies the costs. <\/p>\n

The lawsuits towards Theta Labs are the newest controversy to rattle an business beset by scandals. <\/p>\n

Cryptocurrency alternate FTX collapsed, and its founder, Samuel Bankman-Fried, was sentenced to 25 years in jail in 2024 after being discovered responsible of a number of fraud prices. Binance founder and former Chief Government Changpeng Zhao additionally received jail time after he pleaded responsible to violating cash laundering legal guidelines, however President Trump pardoned him this yr. <\/p>\n

The U.S. Securities and Change Fee beforehand charged celebrities akin to Kim Kardashian, Lindsay Lohan, Jake Paul and Ne-Yo for selling crypto with out disclosing they have been paid to take action.<\/p>\n

Theta Labs created a community that rewarded individuals with cryptocurrency for contributing spare bandwidth and computing energy to boost video streaming and decrease content material supply prices. The corporate describes Theta Community as a \u201cblockchain-powered decentralized cloud for AI, media and leisure.\u201d The community has two tokens: THETA, used to safe the community, and TFUEL, used to pay customers for companies and energy operations.<\/p>\n

The whistleblowers suing Theta Labs are Jerry Kowal, its former head of content material, and Andrea Berry, beforehand the corporate\u2019s head of enterprise growth.<\/p>\n

\u201cLiu used Theta Labs as his private buying and selling car, perpetrating fraud, self-dealing, and market manipulation,\u201d mentioned Mark Mermelstein, Kowal\u2019s legal professional, in a press release. \u201cHis calculated \u2018pump-and-dump\u2019 schemes repeatedly worn out worker and investor worth. This go well with is about demanding accountability and proving nobody is above the legislation.\u201d<\/p>\n

Theta, Liu and its guardian firm, Sliver VR Applied sciences, deny the allegations and \u201cintend to show with proof the fallacy of the tales being advised within the lawsuits,\u201d based on Kronenberger Rosenfeld, the legislation agency representing the defendants. The lawsuits are an try to color the corporate in a adverse gentle in hopes of securing a settlement, a lawyer for the agency mentioned.<\/p>\n

Kowal has sued his former employers earlier than. In 2014, he accused Netflix<\/a> of spreading false claims that he stole confidential info and Amazon of wrongful termination. <\/p>\n

The most recent lawsuits allege that Liu profited from shopping for and promoting THETA tokens utilizing insider information about partnerships with celebrities, studios and others within the leisure business.<\/p>\n

\u201cLiu\u2019s true motive in pursuing such partnerships was to not develop a sustainable content material enterprise however to generate publicity that could possibly be used to artificially inflate token costs for Liu\u2019s private achieve,\u201d Kowal\u2019s lawsuit says. <\/p>\n

Kowal labored for Theta from 2020 to 2025. <\/p>\n

In 2020, Liu traded and bought tokens realizing that the corporate would shut a content material licensing take care of MGM Studios, based on the lawsuit. After the deal\u2019s announcement, THETA token\u2019s market capitalization elevated by greater than $50 million in simply 24 hours, the lawsuit says. <\/p>\n

When NFTs began to take off in 2021, Kowal closed offers with high-profile companions akin to Perry, Fremantle Media and Resorts World Las Vegas for the startup\u2019s NFT market.<\/p>\n

As a part of the take care of Perry, the singer acquired $8.5 million and extra warrants for the proper to license her picture and likeness for the NFTs.<\/p>\n

To inflate the worth and demand for these digital collectibles, Liu allegedly made bids on NFTs and directed staff to do the identical. This led to individuals overpaying for the Perry NFTs.<\/p>\n

Representatives for Perry didn\u2019t instantly reply to a request for remark. <\/p>\n

A number of examples of alleged manipulation are outlined within the lawsuits. In a single occasion from 2022, the startup launched a brand new token referred to as TDROP that staff additionally acquired as a part of a bonus. <\/p>\n

Liu gained management of 43% of the availability of the cryptocurrency, based on Kowal\u2019s lawsuit. When the TDROP token reached a excessive, he then bought the token, and its value collapsed by greater than 90% inside months.<\/p>\n

Berry\u2019s lawsuit additionally alleges that Theta Labs introduced \u201cdeceptive\u201d or faux partnerships with high-profile corporations akin to Google and entities together with NASA to pump up the worth of the THETA token. Theta paid for Google Cloud merchandise however claimed it was a associate when it was a Google buyer, based on the lawsuit. <\/p>\n<\/p><\/div>\n