A Texas magistrate judge has backed YouTuber Logan Paul’s effort to escape a proposed class-action lawsuit over his failed NFT project, CryptoZoo. Judge Ronald Griffin told a federal court in Austin that the plaintiffs had not sufficiently linked Paul to their claims of financial losses, recommending that most of the case be dismissed unless the group files stronger arguments.

The lawsuit, filed in February 2023, accused Paul and his partners of running a “rug pull” scheme, promising perks that never materialized. However, Judge Griffin said the case lacked evidence tying Paul directly to fraud, negligence, breach of contract, or other alleged misconduct. Out of 27 claims, only one—alleging commodity pool fraud—was permanently dismissed. The judge called the claim “truly dizzying” and rejected the argument that CryptoZoo NFTs were option contracts, saying the reasoning required “mental gymnastics.”

While most of the claims could be amended, the judge criticized the lawsuit for offering only “fragments of facts” and vague allegations without clear proof of Paul’s personal involvement or benefit from CryptoZoo’s downfall. Plaintiffs accused Paul of fraud, conspiracy, aiding and abetting, and breaches of consumer protection laws, but Griffin ruled that the evidence presented was too weak to hold him accountable at this stage.

Paul has previously claimed that CryptoZoo’s co-founders, Eduardo Ibanez and Jake Greenbaum, tricked him and caused the project’s collapse. In January 2023, he promised refunds worth $2.3 million, later distributing 0.1 Ether—the original NFT sale price—to buyers who agreed not to sue.

The ruling marks a major turning point that could see Logan Paul cleared from the lawsuit unless plaintiffs rebuild their case with stronger evidence.