DraftKings Agrees to $10 Million Settlement Over NFT Class Action Lawsuit
a day ago
2 min read
DraftKings, a leading online sports betting platform, has reached a $10 million settlement to resolve allegations that its non-fungible tokens (NFTs) were unregistered securities. This settlement comes in response to a class action lawsuit filed by Justin Dufoe, which claimed that DraftKings violated federal and state securities laws by selling these digital assets without proper registration.
Key Takeaways
DraftKings will pay $10 million to settle claims regarding unregistered NFTs.
The settlement covers transactions made between August 11, 2021, and February 28, 2025.
Class members can file claims until July 21, 2025, with potential cash rewards based on their NFT purchases.
Background of the Lawsuit
The lawsuit, titled Dufoe v. DraftKings Inc., was initiated in 2023, alleging that DraftKings’ NFTs were essentially securities because they were traded on the DraftKings Marketplace and linked to the performance of sports players and teams. The plaintiffs argued that the marketplace operated as an unregistered securities exchange, violating securities laws.
DraftKings has not admitted any wrongdoing but opted for a settlement to avoid prolonged litigation. The company had previously attempted to dismiss the lawsuit, but a judge ruled that the claims had merit, leading to the current settlement.
Settlement Details
Under the terms of the settlement:
Total Amount: $10 million
Eligibility: Individuals or entities who purchased, acquired, sold, or otherwise transacted in NFTs on DraftKings from August 11, 2021, to February 28, 2025.
Claim Deadline: Class members must submit valid claims by July 21, 2025.
Potential Rewards: Cash payments will vary based on the amount paid for NFTs and the type of market purchase.
Implications for DraftKings
This settlement comes at a time when DraftKings is reevaluating its NFT business strategy. The company had previously announced the closure of its NFT Marketplace and related products, citing a decline in the NFT market. The lawsuit and subsequent settlement highlight the ongoing regulatory scrutiny surrounding digital assets and the need for companies to ensure compliance with securities laws.
Next Steps for Class Members
Class members interested in claiming their share of the settlement must:
Verify their eligibility based on the transaction period.
Gather proof of purchase, such as transaction details from their DraftKings account.
Submit a claim form by the deadline of July 21, 2025.
The final approval hearing for the settlement is scheduled for July 30, 2025, where the court will review the agreement and ensure it meets legal standards.
Conclusion
The $10 million settlement marks a significant moment for DraftKings as it navigates the complexities of the NFT market and regulatory landscape. As the digital asset space continues to evolve, companies must remain vigilant in adhering to legal requirements to avoid similar disputes in the future.
Sources
$10M DraftKings NFT class action settlement, Class Action Lawsuits.
DraftKings settles NFL players union lawsuit over NFT contract, Reuters.
DraftKings to payout $10m over NFT Marketplace lawsuit, Insider Sport.