Nfts
Dolce & Gabbana under fire from class action lawsuit over botched NFT deliveries
NFT don’t have the same level of influence they had a few years ago, and the fallout from the boom – and bust – of the mainstream NFT The market continues to plague some brands that have gotten in on the action. The ranks of companies facing scrutiny for their NFT strategies have expanded this month to include Dolce & Gabbana.
THE luxury fashion brand named defendant in case class action alleging that when she sold NFTs, she made promises that she did not keep. The complaint also names UNXD, an NFT marketplace that allegedly facilitated Dolce & Gabbana’s NFT deposits and transactions, as a defendant.
Lead plaintiff Luke Brown filed suit in the Southern District Court of New York earlier this month claiming he purchased Dolce & Gabbana NFTs, called DGFamily. According to the complaint, Brown spent $6,000 on DGFamily’s assets under the guise that “purchasers would later receive benefits, including, among other things, digital rewards, physical products, and exclusive access to events.”
But according to Brown and his lawyer, he never received most of the benefits promised by Dolce & Gabbana – and delivery of the NFTs was delayed.
According to the complaint, “[Dolce & Gabbana] never provided a complete set of products [Brown] secured through his digital asset purchases, despite repeatedly promising her that the products would be delivered, while inevitably continuing to push back the delivery date.
According to court documents, the release of the NFTs was delayed because the products had not been accepted on the UNXD marketplace, which the companies did not disclose to investors at the time. In June 2022, the companies announced the first of eight benefits investors were to receive, Brown says.
“The first drop… consisted of digital outfits that could only be used in a metaverse platform with virtually no users, called Decentralized country“, says the complaint.
A complaint metaverse Users have long believed that platforms do not support the transferability of digital assets. So, for example, if a user owns a digital asset in Decentraland, they cannot then transfer that asset to Roblox, another metaverse platform. This appears to be a complaint among DGFamily investors, according to Brown’s complaint. Brown further alleges that Dolce & Gabbana and UNXD failed to obtain proper permissions from Decentraland management before releasing their products, resulting in a delay for investors interested in using the digital products.
A later version, which the complaint says the companies called the “Realtà Parallela collection,” was intended to ship real products to investors, Brown claims; but, according to the complaint, many investors never received their packages, and those who did were charged customs and duty fees.
Brown claimed to have lost $5,800, or nearly 97% of his alleged initial investment, because the value of DGFamily NFTs depreciated so quickly. The class action lawsuit he filed accuses Dolce & Gabbana and UNXD of fraud, breach of contract, negligence and more.
The complaint alleges that Dolce & Gabbana “manipulated the digital currency market for DGFamily products to their advantage by executing a “rug pull.”
In the type of transaction discussed by Brown throughout the case, a rug pull generally refers to a company that profits from consumers’ cryptocurrency investments by abandoning a project after the currency enters, but without offering the so-called benefits that an NFT had been commercialized. as allowing access to.
And Brown believes that, in this case, that’s exactly what Dolce & Gabbana and UNXD did, saying the companies made the choice to “abandon” the project almost entirely.
“Based on information and belief, Defendants made a business decision to forgo a costly and time-consuming process to complete or support the DGFamily Project, and instead deliberately engaged in a scheme to defraud. [Brown] and other consumers,” the complaint alleges, adding that “the companies’ standard operating procedure has been to promise products they failed to deliver, before abandoning a project and community they had promised to sustain “.
This case is far from being Dolce & Gabbana’s only questionable business practice as far as consumers are concerned. In 2018, the brand came under scrutiny for what many called racist ads in its Chinese market, a situation that was only exacerbated by screenshots of Instagram direct messages along with other derogatory comments about China, allegedly coming from Stefano Gabbana, the company’s co-founder.
Even before that, the company had left a bad taste in consumers’ mouths, calling one of its products “the slave sandal” in 2016, according to New York Magazine, and, in 2012, sending white models on the podium with earrings reminiscent of statues of Blackamoor, which, according to the Guardian, “have become an image that romanticizes slavery and plantation life.”
Neither Dolce & Gabbana nor Brown’s attorney responded to Sourcing Journal’s request for comment on the matter.