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DKNG.US
id: 613, Created by Stan Vick, Scout

DraftKings (DKNG) NFTs Case

D. Massachusetts
Court
23-CV-10524
Case number
  • #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:
  1. The NFTs were securities for which DraftKings unlawfully failed to file a registration statement;
  2. 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.
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
Collecting participants…
Created by Stan Vick, Scout

Case history

Stan Vick
27 September 2023
$DKNG NFT Case Update:
  • In a motion to dismiss filed in a Massachusetts federal court, DraftKings contended that the NFTs on their marketplace should not be classified as securities.
  • They argued that purchasers of these NFTs do not participate in $DKNG profits or assume its risks.

DraftKings Inc

DraftKings Inc. operates a digital sports entertainment and gaming company. It offers multi-channel sports betting and gaming technologies, powering sports and gaming entertainment for operators in...

    Ticker
    DKNG.US
    ISIN
    US26142V1052
    CIK
    1772757
    Sector
    Consumer Cyclical
    Industry
    Gambling
    Country
    USA
    Address
    222 Berkeley Street, Boston, MA, United States, 02116