DraftKings (DKNG) NFTs Case

D. Massachusetts

Court

23-CV-10524

Case number

11 Aug 2021

Class period Start

09 Mar 2023

Class period End

11 May 2023

Lead Plaintiff motion deadline

#DraftKings Inc. violated securities laws by selling non-fungible tokens. 
#Investors have suffered significant damages due to $DKNG & its Leaders' misconduct.
Background:
On July 21, 2021, DraftKings announced its plan to launch DK Marketplace, a platform offering curated NFT drops for US dollar purchases and support for a secondary market transaction. The purpose of the DK Marketplace is to provide a platform to sell DraftKings NFTS. 
The NFTs were at all material times subject to an offering document entitled, “Important Legal Notice Regarding DraftKings Marketplace Terms of Use,” updated on August 26, 2022. 
The Legal Notice prohibits selling or disposing of NFTs, other than through the DK Marketplace or explicit permission from DraftKings.
DraftKings intentionally established an initial or primary market for its NFT securities, as well as a secondary market (or exchange) for its NFT securities, and ensured that it would receive the initial investment dollars as well as traditional brokerage- and exchange-like fees for secondary market sales.
On March 3, 2023, DraftKings sent out an e-mail to all users of DK Marketplace notifying them that the Legal Notice had been updated. The e-mail outlined changes that indicate the level of control DraftKings has on DK Marketplace, including “lowering the minimum sale price for a [DraftKings NFT] Secondary Sale to twenty cents ($.20)” and “reserving the right to modify, delete, and/or replace the Content linked to, or associated with, your DraftKings NFT at any time with or without notice

Taking all facts into account, Investors have reasons to suspect DraftKings and its leaders of misleading and breach of fiduciary duties, specifically that:
The NFTs were securities for which DraftKings unlawfully failed to file a registration statement; 
DraftKings ensured that money invested by Investors stayed on DraftKings’ private and exclusively controlled marketplace, propping up the market for an overall valuation of DraftKings’ NFTs; 
As a result, Investors have suffered significant damages.

Case Status

Motion to dismiss

Alleged Offence

Mismanagement,

Misleading Statements,

Financial Misrepresentation,

Fraud,

Failure to Disclose,

Malpractice,

Negligence,

Breach of Fiduciary duty,

Omissions

Suspected Party

Directors,

Management,

Shareholder,

Influencer,

Investment Bank,

Service Provider

Security Type

Crypto Asset

Trade Direction

Long

Shock Event Date

09 March 2023

Filing date

09 March 2023

Lead Plaintiff Deadline

11 May 2023

Judge

Hon. Denise J. Casper

DraftKings (DKNG) NFTs Case

Collecting participants…