Quick take:
- DraftKings is facing a class action lawsuit, which alleges its NFTs are securities.
- It comes amid increasing SEC security on crypto assets that infringe on US securities laws.
- Players of the DraftKings fantasy sports game Rainmakers have been offered buyouts, the email said.
DraftKings is exiting the non-fungible token (NFT) business according to an email sent to customers on Tuesday. The sports gambling company said it is shutting down its NFT business effectively immediately citing legal developments.
“After careful consideration, DraftKings has decided to discontinue Reignmakers and our NFT Marketplace, effective immediately, due to recent legal developments. This decision was not made lightly, and we believe it is the right course of action,” the email said.
The announcement comes just weeks after a Federal judge allowed a class action lawsuit against DraftKings to continue on a “plausible pled” that DraftKings’ NFTs breached US securities laws.
The company joined the market during the NFT industry boom in 2021, with the view that in ten years, the NFT business “could become gigantic.”
However, although some of the OG players in the space like Yuga Labs have adapted to the changes in the industry a mid the crypto winter of the past two years, a lot of the mainstream brands have cooled down their activity.
DraftKings was one of the few mainstream players to remain active in the space via their NFT-powered fantasy sports game, Rainmakers.
But now, even that part of the business alongside the company’s NFT marketplace is shutting down with Rainmakers players offered buyouts. On the other hand, NFT collectors will be allowed to access and transfer their assets.
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