NFT Holders Sue Gallery and Artist, Claiming Promised Perks Were a “Rug Pull” Scam
A collective of 36 NFT holders has initiated legal action against an art gallery and its artist, alleging that they failed to deliver on commitments related to a promised private club in the metaverse.
The lawsuit, filed on October 9 in New York federal court, describes the project associated with Eden Gallery and artist Gal Yosef as a “rug pull” scam.
The NFT collection, known as the Meta Eagle Club, sold 12,000 unique eagle NFTs and amassed approximately $13 million between February 2022 and November 2023. The plaintiffs claim that despite the project’s updates, no meaningful progress was made toward building the Meta Eagle Club.
In their complaint, the group asserts that the developers lacked essential experience in blockchain technology and smart contracts. They were promised various benefits, including access to raffles for exclusive events, but received only a few tickets and limited experiences.
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Additionally, the lawsuit indicates that a decision was made on January 12, 2023, to reallocate funds meant for the original roadmap into alternative uses, citing market challenges as the reason for this shift. The plaintiffs argue that this misled investors into purchasing NFTs based on inflated expectations, which ultimately resulted in losses as the club’s value never materialized.
The lawsuit accuses Eden Gallery and Yosef of fraud and unjust enrichment, seeking damages and attorney’s fees. Neither the gallery nor the artist has commented on the situation.
This lawsuit is part of a broader trend of legal challenges facing the NFT market, which has seen several cases related to buyer dissatisfaction and regulatory scrutiny, amid reports indicating a significant decline in the number of active NFT collections.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
