Art gallery says NFT holders can’t sue over market decline

Eden Gallery, an international art gallery, said a group of NFT holders “may have buyers’ remorse, but their losses, if any, are due to market forces.”

The art gallery has denied responsibility for the losses of NFT (non-fungible token) holders, arguing that the class action should be dismissed because it cannot be held responsible for the drop in NFT prices caused by a broader downturn of the market.

In an attempt to dismiss the case, submitted to a New York federal court on January 7, Eden Gallery Group claimed that the “general market decline” of NFTs did not prove that fraud or misrepresentation had occurred. place as claimed.

“Plaintiffs may have buyer’s remorse (even if the NFTs were a digital art product rather than an investment product), but their losses, if any, are due to market forces.”

In October, a group of 36 people who purchased “Meta Eagle Club” NFTs filed a lawsuit against Eden Gallery. The group accused the gallery of fraud, unjust enrichment and violation of New York general business law.

🚨 NFT Investors Demand $13 Million for “Rug Pull” in Shocking Lawsuit Against Art Gallery! 🚨

In a recent lawsuit, a group of 36 NFT investors filed complaints against Eden Gallery Group Ltd. and artist Gal Yosef for allegedly running a deceptive NFT and metaverse scheme. The trial… pic.twitter.com/bktUivw2Vx

— 🐶 Anh | Studio Corgi (@corgi408) October 10, 2024

NFT holders claimed that Eden Gallery and Gal Yosef’s project “was a sweepstakes attempt.” The Meta Eagle Club NFT collection has sold 12,000 one-of-a-kind eagles, raising $13 million from February 2022 to November 2023.

Eden Gallery said that “NFTs were an extremely popular asset class when Meta Eagle Club NFTs launched in early 2022, but the overall popularity of the NFT market subsequently declined.”

Currently, the starting price of a Meta Eagle Club NFT is 0.0051 ETH, or approximately $17. This is down from 0.6 ETH, or around $1,800, when NFTs launched in February 2022, according to OpenSea.

The NFT owners group alleges they overpaid for NFTs due to misrepresentations by Eden Gallery. They are seeking compensatory damages of between $1,224 and $70,219 per plaintiff.

However, the gallery further argued that each plaintiff’s claim is below the jurisdictional threshold of $75,000 and that combining the claims is not permitted.

NFT sales have increased recently, driven by the rise in the crypto market. Despite this increase, the sector is still down 98% in terms of US dollar sales volumes from its peak in early 2022, claims industry analysis portal CryptoSlam.

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