Nelk Boys Face Lawsuit Over NFT Project Promises

According to Cointelegraph, a lawsuit has been filed against the Nelk Boys, a group of YouTubers, accusing them of not fulfilling promises related to a non-fungible token (NFT) project that generated $23 million. The complaint, lodged by Trenton Smith in a California federal court on January 29, targets Kyle Forgeard, John Shahidi, and their associated entertainment companies. The lawsuit describes the group as "snake-oil salesmen masquerading as entrepreneurs," alleging they failed to deliver on business ventures and investment opportunities tied to their NFT, Metacard. The lawsuit claims that the Nelk Boys offered several perks to Metacard holders, including discounts on branded merchandise, access to an event with rapper Snoop Dogg, and a $250,000 giveaway. However, the suit argues that these promises were not fulfilled, leaving Metacard holders without the expected returns on their $23 million investment. The Nelk Boys are accused of selling an NFT that did not meet the expectations set for purchasers. The complaint further alleges that through their crypto company Metacard, the Nelk Boys minted 10,000 NFTs in January 2022, which sold out rapidly. Each NFT was priced at $2,300, but the lawsuit claims that Metacards lacked intrinsic value beyond the promised perks. Currently, the NFT marketplace OpenSea lists the floor price for a Metacard at 0.034 Ether (ETH), approximately $111. Smith's lawsuit also contends that the Nelk Boys promised NFT holders access to exclusive content, meet-ups, merchandise discounts, and participation in Nelk Boys projects. Smith is seeking damages, equitable relief, restitution, disgorgement of funds from NFT sales, and attorney’s fees. The Nelk Boys have not yet responded to requests for comment, and information on legal representation for Nelk, Forgeard, and Shahidi was unavailable at the time of writing. This lawsuit is part of a broader trend of legal actions against companies involved in NFT projects. In September, a lawsuit was filed against OpenSea, with users alleging the platform sold unregistered securities. The NFT market continues to face challenges, with reports indicating that 2024 was the worst year for trading and sales volumes since 2020.