DraftKings to Pay $10 Million in Class-Action Settlement After NFT Project Collapse

Bookmaker DraftKings has agreed to a $10 million settlement with buyers of its non-fungible tokens (NFTs), which the company had sold through its now-defunct DraftKings Marketplace, reports Cointelegraph.

The settlement will distribute the $10 million among all members of the class-action lawsuit. For context, the lawsuit was originally filed by Justin Dufault, who lost around $14,000 on NFT investments.

What Were the Claims Against DraftKings?

The complaint alleged that users of DraftKings Marketplace were “entirely dependent on the managerial efforts of DraftKings executives” and that the company’s actions left customers in a vulnerable position.

In simpler terms, buyers expected to flip these NFTs for a profit, but the reality turned out to be the opposite.

Dufault, for example, spent around $72,000 on NFTs from DraftKings Marketplace, only to sell them at a loss for $58,000 as their value plummeted.

Then the platform shut down completely. DraftKings decided to pull the plug on its NFT marketplace over concerns about potential regulatory scrutiny, particularly the risk of penalties for operating without the proper licensing.

Once DraftKings Marketplace closed, the bookie’s NFTs became essentially worthless. The company initially offered partial refunds, but many users found the compensation insufficient.