Burwick Law Calls Out Metaplex's Plan to Sweep Unclaimed SOL into Its Treasury

Crypto law firm Burwick Law has called out Solana-based non-fungible token platform Metaplex's plan to sweep unclaimed SOL into its treasury instead of returning it to investors.

Crypto law firm Burwick Law has called out Solana-based non-fungible token platform Metaplex’s plan to sweep unclaimed Solana (SOL) into its treasury, suggesting it could be at risk of litigation if it follows through with the plan.

Last year, Metaplex, an NFT protocol, discovered a way to reduce the amount of onchain storage required for certain NFTs. By resizing the NFTs, Solana NFT holders can claim a small amount of SOL.

In October, Metaplex said that Metaplex Token Metadata (TM) NFT holders will be able to execute a “resize optimization” for all TM accounts with a deadline of April 25.

Those who didn’t do it voluntarily by the deadline would have their excess SOL transferred to the Metaplex DAO automatically, with how they’re to be used yet to be determined.

However, Burwick criticized the firm’s plan to sweep unclaimed funds to its DAO treasury instead of returning them to NFT holders.

“Many minters never received clear notice that these lamports could be swept, let alone diverted to a treasury they do not control,” Burwick said in an April 22 open letter to Metaplex and the broader Solana community.

Burwick said over 54,000 SOL tokens are at risk, and according to Metaplex’s website, only 7,043 SOL have been claimed. At current market prices, more than $6.5 million remains unclaimed.

Burwick said many of the NFT collectors it represents have shared “deep concerns” about the plan.

Burwick added that Metaplex’s plan “erodes trust” and “violates the spirit of crypto.”

Burwick said such a move could entitle victims to restitution should a court find the sweep constituted unjust enrichment or violates consumer protection laws.

Metaplex hasn’t responded to Burwick’s X post. Cointelegraph reached out to Metaplex but didn’t receive an immediate response.

Metaplex said the unclaimed SOL may be used for the DAO to vote on airdrops, distribute grants to ecosystem builders, or other initiatives.

Burwick pitches what Metaplex should do instead

The crypto lawyers advised Metaplex to pause the plan and refund rent directly to current NFT holders while retaining a “modest” network-maintenance bounty of 10%.

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Burwick noted that other DeFi protocols have resolved similar issues this way.

The lawyers said there is still plenty of time for Metaplex to execute such a strategy and avoid litigation where funds could be frozen.