Eden Gallery claimed NFT owners might have “buyers’ remorse,” but any losses stem from market forces.
The art gallery has argued that it is not liable for any losses in the prices of non-fungible tokens (NFTs) as a result of a broader market decline, and therefore, a class-action lawsuit from a group of NFT holders should be dismissed.
In a petition to dismiss filed in a New York federal court on Jan. 7, the Eden Gallery Group contended that a “general market decline” in NFTs does not demonstrate that fraud or misrepresentation occurred as alleged.
“Plaintiffs may have buyers’ remorse (even though 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 individuals who purchased “Meta Eagle Club” NFTs filed a lawsuit against Eden Gallary, alleging a violation of New York’s General Business Law, unjust enrichment, and fraud.
The group asserted that the initiative of Eden Gallery and artist Gal Yosef was “a rug pull.”
Between February 2022 and November 2023, the Meta Eagle Club NFT collection sold 12,000 unique humanlike eagles and amassed $13 million.
Eden Gallery stated in its motion that “NFTs were extremely popular as an asset class when the Meta Eagle Club NFTs were released in early 2022; however, the popularity of the NFT market in general declined thereafter.”
As per OpenSea, the current floor price for a Meta Eagle Club NFT is 0.0051 ETH, which is equivalent to approximately $17.
This price was higher at the time of their introduction in February 2022, when it was 0.6 ETH, or approximately $1,800.
The group is requesting compensatory damages that range from $1,224 to $70,219 per claimant, alleging that they overpaid for the NFTs as a result of alleged misrepresentations by the gallery.
Eden Gallery also contended that the plaintiff’s claims do not satisfy the jurisdictional threshold of $75,000 and that the aggregation of claims is unlawful.
According to CryptoSlam, an industry analytics portal, the sector is 98% below its highs in early 2022 in US dollar sales volumes, despite a recent increase in NFT sales resulting from the crypto market bull run.
