DraftKings has agreed to a $10 million settlement in a class-action lawsuit claiming its now-defunct NFT marketplace violated securities laws — but that resolution may be unraveling, as new objections emerge from affected users and competing plaintiffs.
🚨 Class-Action Settlement Overview
The lawsuit, filed in March 2023, alleges that DraftKings sold non-fungible tokens functioning as unregistered securities and operated its DK Marketplace without proper licensing BitDegree+14Next+14Class Action+14.
A U.S. District judge allowed the case to move forward under the Howey test in July 2024, determining the NFTs could plausibly be considered investment contracts iGaming.org+5Cointelegraph+5CryptoNews+5.
As a result, DraftKings launched an 18-month negotiation—culminating in a preliminary agreement to establish a $10 million compensation fund for those who bought, sold, or held DraftKings NFTs between August 11, 2021, and the judgment date BitDegree+15Class Action+15CryptoNews+15.
⚠️ New Objections Surface
Despite initial approval, fresh objections have been filed by potential claimants seeking a larger payout, citing that the current settlement covers only about 26% of estimated damages (original loss estimates ranged between $18 million–$58 million) BitEdge+3Class Action+3BitDegree+3. Critics argue the agreement disproportionately benefits attorneys and corporate defendants over actual victims.
🗓️ Key Deadlines Approaching
- Claim deadline: July 21, 2025 — participants must file valid claims with transaction proof Public Law Library+6Class Action+6Claim Depot+6.
- Fairness hearing: July 30, 2025 — court to review objections and finalize the settlement terms BitEdge+6Claim Depot+6Next+6.
🌐 Broader Implications for NFT Compliance
DraftKings’ NFT fallout, coupled with its separate settlement with the NFL Players Association, illustrates deepening regulatory scrutiny within the NFT space SBC Americas+15Reuters+15Cointelegraph+15. The case highlights the growing need for NFT issuers to ensure compliance with securities laws to avoid future legal entanglements.
