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DraftKings is launching the Reignmakers NFT virtual sports experience and marketplace. Users can withdraw NFTs and receive cash payments. The move follows legal developments in a class action lawsuit in Massachusetts federal court.
Fantasy sports organization DraftKings notified users on Tuesday that its Polygon-powered NFT experience Reignmakers has ended its ineffectiveness with immediate effect.
Citing “recent legal developments,” the company wrote in an e-mail Decrypt The termination of Reignmakers and its associated NFT marketplace. Meanwhile, users have the option of “giving up those game pieces” or withdrawing them to a self-contained wallet in exchange for a cash payment.
Originating from 2021 Agreement Together with Polygon, the Ethereum Scaling Network, DraftKings' Reignmakers allows users to compete in fantasy sports tournaments across football, golf and mixed martial arts. The price of NFTs sometimes fluctuates based on athletes' performances, and can be resold on a designated market place.
“The decision was not an easy one,” DraftKings told users in an email Tuesday, adding, “We extend our sincere thanks to all of you who have made Reignmakers special. As of Monday, DraftKings was still tweeting about Reignmakers contests.”
The sudden end of Reignmakers and DraftKings' NFT marketplace is due to a recent ruling by a Massachusetts federal court, according to a person familiar with the matter. Decrypt. In a class action lawsuit filed last March, DraftKings users alleged that Regan Makers NFTs were unregistered securities subject to the Howey test, a property legal framework.
DraftKings moved to dismiss the suit, but Judge Dennis Jefferson Kasper of the United States District Court for the District of Massachusetts ruled on the suit. It may proceed to trial.
Casper alleged earlier this month that the plaintiffs in the lawsuit “satisfy three prongs of the Hawaii test,” which include investing money in a joint venture where profits are expected to come from other endeavors.
“I'm not spending another dollar on this dumpster fire,” said Reddit user No_Gap4123. He lamented In the DraftKings' community. Another user sirjackel06 He wrote“If you don't fix this, I'm going to sue.”
DraftKings said in a written statement Decrypt NFTs and “Reignmakers digital game pieces” will remain accessible and transferable when the termination begins. He added that the company will continue to update the community on the “correct course of action.”
Dapper Labs, the company behind the NBA's Top Shot and other popular gatherings on the chain in June 4 million dollar settlement With frustrated owners of NFTs. In that lawsuit, customers alleged that NFTs offered by Dapper Labs created unregistered securities.
“It's always been in DraftKings' DNA to innovate and disrupt to provide our customers with the best gaming experience possible,” DraftKings continued, adding that Regan Makers and the NFT Marketplace “have been an instant success since launch.”
A different Reddit user is Aberdeen1964 He wrote DraftKings said they were worried they would have to “finish the season” and that the payout would be less than what they spent.
Out of multiple sports, DraftKings NFTs have generated $280 million in total sales—including secondary market trading—according to CryptoSlam. Data. As the NFL season began last September, the project recorded its best month ever with $21 million in total sales across 30,000 unique buyers.
While DraftKings' NFTs can sometimes fetch thousands of dollars in the secondary marketplace — a top sale of $70,000 took place three years ago — the majority left for small change. That includes what may be the project's last trade, when Reignmakers NFT sold Tuesday for $0.33.
Edited by Andrew Hayward.
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