DraftKings shuts down NFT Marketplace Amid Litigation

IconCryptoNewsTerminal Staff30 Jul, 2024

cryptonews.jpg

DraftKings shuts down NFT Marketplace Amid Litigation

DraftKings Shuts Down NFT Marketplace Amid Litigation Nasdaq-listed sports betting and fantasy sports company DraftKings has announced the immediate discontinuation of its NFT marketplace business. In a memo to its customers, DraftKings stated, "Following an internal review, we've made the decision to wind down our NFT Marketplace business entirely due to ongoing legal proceedings." DraftKings had launched its Polygon (MATIC)-based NFTs in December 2021, claiming that they satisfied the requirements of the Howey Test, which is used to determine whether an investment contract is a security. However, in March 2023, DraftKings was hit with a class-action lawsuit alleging that its NFTs were unregistered securities. The Massachusetts court in this case had agreed that DraftKings had stated that their NFTs met the Howey Test requirements. The shutdown of DraftKings' NFT marketplace is a significant development in the ongoing debate over the regulation of NFTs. It is unclear whether other NFT marketplaces will follow suit, but the move by DraftKings is likely to increase pressure on regulators to provide clear guidance on the treatment of NFTs under securities laws.

Related News