DraftKings faces class action suit over NFTs as securities after judge denies dismissal motion
A class action lawsuit against DraftKings, alleging that its NFTs are securities, has been allowed to proceed by a US judge in Massachusetts. This decision paves the way for a future trial on the classification of NFTs as securities. DraftKings had attempted to have the lawsuit dismissed, which was brought by buyers of its sports-themed NFTs on the Polygon blockchain. The lawsuit claims that the NFTs are investment contracts and meet the criteria of the Howey test. The court agreed that the NFTs involved an investment of money, pooled assets into a common enterprise with shared risks and profits, and created a reasonable expectation of profit from DraftKings' efforts, thus plausibly classifying them as securities.
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