Eden Gallery Seeks Dismissal Of NFT Lawsuit Amid Market Decline

According to Cointelegraph, Eden Gallery Group has filed a motion to dismiss a class-action lawsuit brought by a group of non-fungible token (NFT) holders. The lawsuit, filed in a New York federal court, alleges that the gallery is responsible for the decline in the value of NFTs due to a broader market downturn. Eden Gallery contends that the general market decline in NFTs does not indicate any fraud or misrepresentation related to its collection. The plaintiffs, comprising 36 individuals who purchased "Meta Eagle Club" NFTs, initiated the lawsuit in October, accusing Eden Gallery and artist Gal Yosef of fraud, unjust enrichment, and violating New York's General Business Law. They claim the project was a "rug pull," with the Meta Eagle Club NFT collection selling 12,000 unique humanlike eagles and generating $13 million between February 2022 and November 2023. Eden Gallery argues that when the Meta Eagle Club NFTs were launched in early 2022, NFTs as an asset class were extremely popular. However, the popularity of the NFT market has since waned. The floor price for a Meta Eagle Club NFT has dropped significantly, currently standing at 0.0051 ETH, or approximately $17, compared to 0.6 ETH, or around $1,800, at the time of their launch, as per data from OpenSea. The plaintiffs assert that they overpaid for the NFTs due to alleged misrepresentations by the gallery and are seeking compensatory damages ranging from $1,224 to $70,219 per claimant. Eden Gallery, however, argues that none of the individual claims meet the jurisdictional threshold of $75,000 and that the aggregation of claims is not permissible. Despite a recent increase in NFT sales driven by a crypto market bull run, the sector remains 98% down from its peak in early 2022 in terms of US dollar sales volumes, according to industry analytics portal CryptoSlam.