A group of 36 disgruntled non-fungible token (NFT) holders has taken legal action against Eden Gallery and artist Gal Yosef, accusing them of failing to deliver on promises tied to their NFT collection, the Meta Eagle Club. The group, in an Oct. 9 complaint filed in a New York federal court, claimed the project was a “rug pull” scam, leaving investors with worthless digital assets despite initial assurances of exclusive perks and benefits.
The Meta Eagle Club, launched between February 2022 and November 2023, featured 12,000 unique NFTs of humanlike eagles, reportedly generating $13 million in sales. However, the plaintiffs allege that despite grandiose plans to develop a private metaverse-based club, nothing substantial was ever built. While updates from the team indicated progress, the group claims these were misleading and unfulfilled promises.
Unkept Promises Leave Investors Empty-Handed
The plaintiffs were initially drawn in by a roadmap promoting a variety of perks for Meta Eagle Club members. These included raffles for access to Eden Gallery events, hot air balloon rides, helicopter trips, private jets, and exclusive collectible artworks.
However, according to the lawsuit, only a “handful of tickets” to these experiences were ever distributed. Beyond a couple of events and a few signed artworks by Gal Yosef, most of the promises remained unfulfilled.
One of the key accusations in the lawsuit is the lack of relevant experience among those responsible for building the project. The complaint asserts that the team behind the Meta Eagle Club had little to no background in blockchain, smart contracts, or software development, further amplifying concerns of mismanagement.
In January 2023, a shift in priorities was reportedly made due to the market downturn, as per a vote in Eden Gallery’s Discord community. Funds were reallocated to maintain the marketplace rather than fulfilling the original roadmap’s promises.
Legal Battle Ahead for NFT Mismanagement
The plaintiffs accuse Eden Gallery and Yosef of common law fraud, unjust enrichment, and violations of New York’s General Business Law. They claim their investments were based on “materially false information” and that they paid way more for the NFTs than they were worth. The lawsuit seeks damages, injunctive relief, and attorney’s fees.
This case echoes similar legal disputes in the NFT space. In September, OpenSea faced a class action lawsuit over selling unregistered securities contracts, while Italian fashion brand Dolce & Gabbana was also sued for delays in delivering NFT products. The NFT market continues to struggle, with a recent report indicating that 96% of collections have become worthless in 2024.
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