Eden Gallery Group is facing a class-action lawsuit from NFT holders claiming the gallery is responsible for their losses due to a market downturn.
Lawsuit Against Eden Gallery Group
A group of 36 individuals who purchased 'Meta Eagle Club' NFTs sued Eden Gallery in October, alleging fraud, unjust enrichment, and violation of New York’s General Business Law. The 'Meta Eagle Club' project involved 12,000 unique NFTs and collected $13 million between February 2022 and November 2023.
Defense Arguments
Eden Gallery argues that the decline in NFT value is due to broad market trends, not their conduct. They assert that 'NFTs as an asset class were extremely popular when the Meta Eagle Club NFTs were first released in early 2022, but the popularity of the NFT market in general then ebbed.' The gallery also highlights that the drop in the Meta Eagle Club NFT price from 0.6 ETH to 0.0051 ETH is a result of market forces.
NFT Market: Current Situation
Despite a recent increase in NFT sales driven by a bullish crypto market, the sector remains 98% below its early 2022 peak. Eden Gallery claims that the plaintiff's allegations do not meet minimum legal requirements per claim, and aggregation of claims is impermissible.
The legal battle between NFT holders and Eden Gallery highlights the complexities of declining NFT markets and accountability. The court's forthcoming decision may have significant implications for legal proceedings in such cases.
