Dolce & Gabbana class action alleges brand sold ‘worthless’ NFTs

Dolce & Gabbana class action overview: 

• Who: Plaintiff Luke Brown filed a class action lawsuit against Dolce & Gabbana. 
• Why: Dolce & Gabbana sold Non-Fungible Tokens with promises of benefits that were never realized by purchasers.
• Where: The Dolce & Gabbana class action was filed in federal court in New York.

A customer filed a class action lawsuit against Dolce & Gabbana over claims that the company’s Non-Fungible Tokens (NFTs) came with promises of benefits that were never realized by purchasers.

Dolce & Gabbana created DGFamily to sell NFTs with a set of benefits, including digital wearables for the Metaverse, physical clothing and live events for purchasers of multiple boxes.

“Either through reckless incompetence or greed, Defendants failed to deliver what they promised in exchange for purchasing their digital assets and abandoned their crypto project while retaining over $25 million used to fund the project,” the lawsuit says.

Plaintiff Luke Brown’s lawsuit calls the NFT sale a “fraudulent and manipulative scheme” which enriched DGFamily after “false and materially misleading statements” about the value and benefits of purchasing the NFTs.

Lawsuit: DGFamily NFT sales were unauthorized, unlawful solicitations

Dolce & Gabbana and DGFamily were not registered to sell securities, meaning they made unlawful solicitations and offers in violation of the Securities Act of 1933.

Securities protections are in place to ensure sellers do not omit pertinent information. Without those protections, securities could be offered with no disclosure at all, the lawsuit says.

DGFamily sold the NFTs to purchasers for cryptocurrency, which DGFamily then transferred to wallets controlled by it and Dolce & Gabbana.

“Defendants’ public offer and sale of DGFamily Products was an unlawful offering of unregistered securities for which no exemption from registration was available under the Securities Act,” the lawsuit says.

Stoner Cats 2 LLC was fined $1 million in September 2023 after it sold $8.2 million in non-fungible tokens (NFTs) that were considered securities without registering the sale with the United States Securities and Exchange Commission.

Did you purchase an NFT from Dolce & Gabbana? Let us know in the comments.

The plaintiff is represented by Alex P. Clavering, Attorney at Law along with Jarrett L. Ellzey, Leigh S. Montgomery and Alexander G. Kykta of Ellzey & Associates PLLC. 

The Dolce & Gabbana class action lawsuit is Brown v. Dolce & Gabbana USA Inc., et al., Case No. 1:24-cv-03807, in the U.S. District Court for the Southern District of New York.

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