Lawsuit Filed Against Artist and Gallery Over Alleged NFT Scam

Legal Action Taken by NFT Holders

Allegations of Promised Perks Not Delivered

Thirty-six holders of non-fungible tokens (NFTs) have initiated legal proceedings against an artist and art gallery, accusing them of failing to fulfill promises related to a metaverse-based private club and other benefits.

Claims of a ‘Rug Pull’ Scam

Complaint Filed in New York Federal Court

The group lodged a complaint in a New York federal court on October 9, alleging that the project by Eden Gallery and artist Gal Yosef was a “rug pull” scam.

Details of the NFT Collection

Meta Eagle Club’s Financial Success

The NFT collection, known as Meta Eagle Club, sold 12,000 unique humanlike eagles and generated $13 million between February 2022 and November 2023.

Unfulfilled Promises and Alleged Lack of Experience

Failure to Deliver Meta Eagle Club and Promised Perks

Despite regular project updates, the group claimed that little progress was made in establishing the Meta Eagle Club as promised. They also alleged that the team lacked the necessary expertise in blockchain and smart contract development.

Discrepancies in Promised Benefits

Shortfalls in Perks for NFT Holders

NFT holders were promised entry into the Meta Eagle Club and various perks, such as access to events, rides, and exclusive artworks. However, the group claimed they received only a fraction of what was originally advertised.

Shift in Project Priorities

Changes in Budget Allocation and Project Direction

The community voted to repurpose the project budget into alternative utilities due to market conditions, which affected the delivery of promised benefits to NFT holders.

Legal Ramifications and Compensation Sought

Accusations and Legal Actions Against Gallery and Artist

The group accused Eden Gallery and Yosef of fraud, unjust enrichment, and violations of the New York General Business Law. They are seeking damages and reimbursement for legal fees.

Continued Legal Challenges in the NFT Market

Growing Trend of Legal Disputes Over NFTs

This lawsuit is part of a larger trend of legal actions within the NFT market, with buyers seeking recourse for unfulfilled promises and losses.