Dolce & Gabbana Sued Over Alleged Major Loss on Metaverse Outfit NFTs

Italian fashion house Dolce & Gabbana is facing legal action after a customer claimed that the value of NFTs purchased from the company plummeted by 97% due to delivery issues and unmet promises.

The lawsuit, filed on Thursday, alleges that Dolce & Gabbana USA sold NFTs on the Ethereum blockchain, promising buyers a range of digital, physical, and experiential benefits. These NFTs, part of the DGFamily collection, were marketed as keys to exclusive digital rewards, physical products, and special events.

However, the plaintiff, Luke Brown, contends that the company failed to deliver the NFTs and the associated benefits on time. The digital outfits were reportedly delivered 20 days late and could only be used on a metaverse platform with minimal user engagement. Furthermore, token holders had to wait an additional 11 days before they could utilize the NFTs, as Dolce & Gabbana had not secured the necessary approvals from the metaverse platform in advance.

The complaint accuses Dolce & Gabbana of a pattern of promising products they fail to deliver and subsequently abandoning projects and communities they pledged to support. Brown claims he lost $5,800 on the NFTs and is suing on behalf of other affected buyers. The lawsuit also names NFT marketplace UNXD as a co-defendant.

Several companies have faced lawsuits related to NFTs (non-fungible tokens) in recent years.

Yuga Labs sued artist Ryder Ripps and his partner Jeremy Cahen for trademark infringement and false advertising over their “RR/BAYC” NFT collection, which parodied the Bored Ape Yacht Club. In October 2023, a judge awarded Yuga Labs nearly $1.6 million in damages.

In January 2023, a group of investors filed a class-action lawsuit against Sotheby’s, alleging that the auction house artificially inflated the prices of Bored Ape Yacht Club NFTs during a 2021 sale. The lawsuit also named celebrities like Paris Hilton and Justin Bieber, accusing them of promoting the NFTs without disclosing their financial interests.

In 2022, Nike sued the resale platform StockX for trademark infringement over its “Vault NFTs,” which featured Nike’s brand and shoe designs. Nike alleged that StockX misled consumers into thinking the NFTs were official Nike products. The case is ongoing.

The legal action comes amid a broader context of slowing growth in the NFT market. While there has been a 41% increase in marketplace value in 2024 compared to 2023, this growth is significantly slower than in previous years. High-profile sales, such as CryptoPunk 3100 fetching $16 million in March, contrast with the overall trend of declining NFT values.

The outcome of this lawsuit could have significant implications for the NFT market and the responsibilities of companies selling digital assets.

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