Eden Gallery Rejects Responsibility for NFT Holders’ Losses, Argues Class Action Should Be Thrown Out

Eden Gallery, an international art gallery, stated that a group of NFT holders “may have buyers’ remorse, but their losses, if any, are due to market forces.”

An international art gallery has stated that a group of NFT holders “may have buyers’ remorse, but their losses, if any, are due to market forces.”

Eden Gallery Group Ltd. is attempting to dismiss a class action lawsuit filed against the gallery over declining NFT prices. The gallery claims that the broader market downturn, not any fraud or misrepresentation on their part, is to blame for the losses.

“Plaintiffs may have buyers’ remorse (even though the NFTs were a digital art product rather than an investment product), but their losses, if any, are due to market forces,” Eden Gallery stated in the filing.

The art gallery is being sued by a group of 36 people who bought “Meta Eagle Club” NFTs. They filed a lawsuit in October, accusing Eden Gallery and the artist Gal Yosef of fraud, unjust enrichment, and violating New York’s General Business Law.

The NFT holders claim that Eden Gallery and Yosef's project “was a rug pull.” The Meta Eagle Club NFT collection features 12,000 unique human-like eagles and raised $13 million from February 2022 to November 2023.

“NFTs were an extremely popular asset class when the Meta Eagle Club NFTs launched in early 2022, but the overall popularity of the NFT market subsequently declined,” Eden Gallery stated.

The starting price for a Meta Eagle Club NFT is now 0.0051 ETH, or around $17, on OpenSea, down from 0.6 ETH, or about $1,800, when the NFTs were airdropped in February 2022.

The group of NFT owners alleges they overpaid for the NFTs due to misrepresentations by Eden Gallery and are seeking compensatory damages ranging from $1,224 to $70,219 per claimant.

However, the gallery also stated that each plaintiff's claim falls below the $75,000 jurisdictional threshold and that combining the claims is not permitted.

NFT sales have seen a recent uptick as the crypto market rallies, but the sector is still down 98% in US dollar sales volume from its early 2022 peak, according to industry analytics portal CryptoSlam.