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 the defendants failed to fulfill commitments made when selling their nft collection. Headlines allege that promised benefits, such as access to a private club located in the metaverse, were never fully provided.
Source: Galyverse
The lawsuit, filed Oct. 9 in federal court in New York, accuses Eden Gallery and Yosef of running a “rug pulling” scam. The plaintiffs claim that the Club Águila Meta The project sold 12,000 Eagle nfts and raised $13 million from February 2022 to November 2023. However, headlines claim that not much was done to establish the Meta Eagle Club, despite updates suggesting progress.
The group also alleges that the team lacked experience in blockchain and software development, making them unqualified to deliver on their promises.
The Meta Eagle Club was marketed with promises of different benefits, namely access to private jets, hot air balloon rides and events at Eden Gallery, and exclusive works of art. nft holders were also promised entry to the Meta Eagle Club.
But according to the lawsuit, not many of these benefits were actually received. The group claims that very few tickets were distributed for the events that were promoted. There were also only two Galyverse events and eleven pieces of art signed by Gal Yosef.
Voters in Eden Gallery's Discord on January 12, 2023 decided to reallocate project funds to “alternative utilities,” such as maintaining an active market. The change was attributed to the market decline. According to the group, this election resulted in broken promises.
nft holders also claim that Eden Gallery and Yosef promised more art for the online world, Galyverse. Investors were led to believe that this would increase the value of their nfts. The group now argues that these claims were false and caused them financial losses.
Eden Gallery and Yosef are charged with common law fraud and unjust enrichment. They claim they paid much more for the nfts than they were worth. In addition to attorneys' fees, they are demanding damages and injunctive relief.
There has been previous litigation over nfts. Two OpenSea users filed a class-action lawsuit in September, alleging that the company traded securities contracts that were not registered. Dolce & Gabbana was the subject of a similar lawsuit in May due to delays in the delivery of nft products.
The nft market as a whole continues to struggle. According to an nft Evening report from August, 96% of the 5,000 nft collections analyzed were anticipated to be extinct by 2024. This case draws attention to persistent problems as customers seek compensation for broken agreements.
