NFT Holders File Lawsuit Against Eden Gallery and Gal Yosef
36 NFT holders have launched legal action against Gal Yosef, the artist, and Eden Gallery, alleging that defendants neglected to fulfill commitments made while selling their NFT collection. The holders allege that the promised perks, such as access to a private club situated in the metaverse, were never fully provided.
Source: Galyverse
The lawsuit, submitted on October 9 to a federal court in New York, accuses Eden Gallery and Yosef of conducting a “rug pull” scam. The plaintiffs state that the Meta Eagle Club project, sold 12,000 eagle NFTs, collected $13 million from February 2022 to November 2023. However, the holders claim that Not much was done to establish the Meta Eagle Club, despite updates suggesting progress.
The group also alleges that the team lacked expertise in blockchain and software development, making them unqualified to fulfill their promises.
The Meta Eagle Club was marketed with promises of different perks, namely access to private jets, hot air balloon rides, and events at Eden Gallery, and exclusive artworks. NFT holders were also promised entry into the Meta Eagle Club.
But according to the lawsuit, not many of these benefits were really received. The group claims that there were very few tickets given out for the events that were being promoted. There were also only two Galyverse events and eleven signed pieces of art by Gal Yosef.
Voters on Eden Gallery’s Discord on January 12, 2023, decided to reallocate the project’s funding to “alternative utilities,” such as maintaining an active marketplace. The shift was attributed to the decline in the market. According to the group, this choice resulted in broken promises.
The NFT holders also claim that Eden Gallery and Yosef promised more art for the online world, Galyverse. Investors were led to believe this would increase the value of their NFTs. The group now argues that these claims were false, causing them financial losses.
Eden Gallery and Yosef are being accused of common law fraud and unjust enrichment. They assert that they paid far more for the NFTs than they were worth. In addition to attorney’s fees, they demand damages and injunctive relief.
There have been previous litigation over NFTs. Two OpenSea users filed a class-action lawsuit in September, alleging the company marketed securities contracts that were not registered. Dolce & Gabbana was the target of a similar lawsuit in May due to delivery delays of NFT merchandise.
The NFT market as a whole is still having trouble. According to an August NFT Evening report, 96% of the 5,000 NFT collections that were looked at were anticipated to be extinct by 2024. This case draws attention to persistent issues as customers seek compensation for broken agreements.