Nfts
Dolce & Gabbana class action lawsuit alleges brand sold ‘worthless’ NFTs
Dolce & Gabbana class action lawsuit overview:
- WHO: Plaintiff Luke Brown filed a class action lawsuit against Dolce & Gabbana.
- For what: Dolce & Gabbana sold non-fungible tokens with promises of benefits that were never fulfilled by buyers.
- Or: The Dolce & Gabbana class action lawsuit was filed in federal court in New York.
A customer has filed a class action lawsuit against Dolce & Gabbana on the grounds that the company’s non-fungible tokens (NFTs) came with promises of benefits that were never fulfilled by buyers.
Dolce & Gabbana created DGFamily to sell NFTs with a set of benefits, including digital wearables for the metaverse, physical clothing, and live events for multi-box buyers.
“Either through reckless incompetence or greed, the defendants failed to fulfill their promises in exchange for the purchase of their digital assets and abandoned their crypto project while retaining over $25 million used to fund the project ” the lawsuit states.
Plaintiff Luke Brown’s lawsuit calls the sale of NFTs a “fraudulent and manipulative scheme” that enriched DGFamily after “false and materially misleading statements” about the value and benefits of purchasing NFTs.
Lawsuit: DGFamily NFT sales were unauthorized and illegal solicitations
Dolce & Gabbana and DGFamily were not registered to sell securities, meaning they made illegal solicitations and offers in violation of the Securities Act of 1933.
Title protections are in place to ensure that sellers do not omit relevant information. Without these protections, the securities could be offered without any disclosure, the lawsuit says.
DGFamily sold the NFTs to buyers for cryptocurrencies, which DGFamily then transferred to wallets controlled by it and Dolce & Gabbana.
“Defendants’ public offering and sale of the DGFamily products constituted an illegal offering of unregistered securities for which no exemption from registration was available under the Securities Act,” the lawsuit states.
Stoner Cats 2 LLC was fined $1 million in September 2023 after selling $8.2 million worth of non-fungible tokens (NFTs) that were considered securities without registering the sale with the United States Securities and Exchange Commission.
Have you purchased an NFT from Dolce & Gabbana? Let us know in the comments.
The plaintiff is represented by Alex P. Clavering, attorney, along with Jarrett L. Ellzey, Leigh S. Montgomery and Alexander G. Kykta of Ellzey & Associates PLLC.
THE Class action against Dolce & Gabbana East Brown v. Dolce & Gabbana USA Inc., et al., Case No. 1:24-cv-03807, in the United States District Court for the Southern District of New York.
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