The art gallery argues that NFT holders cannot sue for market declines.

Eden Gallery, an international art museum, stated that a group of NFT holders “may experience buyer’s remorse, but any losses will be due to market forces.”

The art gallery has denied liability for the losses of non-fungible token (NFT) holders and argued that the class action lawsuit should be dismissed because it cannot be held liable for NFT price declines due to a widespread market downturn.

In seeking dismissal of the case filed Jan. 7 in federal court in New York, Eden Gallery Group argued that the “general market decline” in NFTs does not prove that fraud or misrepresentation occurred as alleged.

“Plaintiffs may have buyer’s remorse (even though NFTs were digital art products and not investment products), but their losses were due to market forces.”

Last October, a group of 36 people who purchased the ‘Meta Eagle Club’ NFT filed a lawsuit against Eden Gallery. The group accused the gallery of fraud, graft and violations of New York’s general business laws.

🚨 NFT investors claim $13 million “Rug Pull” in shocking lawsuit against art gallery! 🚨

In a recent lawsuit, a group of 36 NFT investors filed suit against Eden Gallery Group Ltd. and artist Gal Yosef for allegedly operating a fraudulent NFT and metaverse scheme. The lawsuit… pic.twitter.com/bktUivw2Vx

— 🐾An | Corgi Studio (@corgi408) October 10, 2024

NFT holders claimed Eden Gallery and Gal Yosef’s project was “sloppy.” The Meta Eagle Club NFT collection raised $13 million between February 2022 and November 2023 by selling 12,000 unique human-like eagles.

“At the time the Meta Eagle Club NFT launched in early 2022, NFTs were a very popular asset class, but the overall popularity of the NFT market has since declined,” Eden Gallery said.

The current starting price of the Meta Eagle Club NFT is 0.0051 ETH, or approximately $17. According to OpenSea, this is down from 0.6 ETH, or about $1,800, when NFTs launched in February 2022.

A group of NFT owners claim they were overpaid for their NFTs due to misrepresentations by Eden Gallery. It seeks damages ranging from $1,224 to $70,219 per claimant.

However, the gallery argued that each plaintiff’s claim was below the jurisdictional threshold of $75,000 and that combining the claims was not permitted.

NFT sales have recently increased thanks to the strength of the cryptocurrency market. Despite this increase, industry analysis portal CryptoSlam claims that US dollar sales in the sector are still down 98% compared to their peak in early 2022.

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