Class Action v. DraftKings

A class action lawsuit alleged DraftKings Inc. unlawfully sold non-fungible tokens (NFTs) as unregistered securities and operated its DK Marketplace as an unregistered securities exchange, violating the Securities Exchange Act of 1934. Filed in Massachusetts, the lawsuit claimed DraftKings profited from primary NFT “drops” and a 5% commission on secondary market transactions, while promoting “gamified NFTs” for cash prizes to boost investor interest. The NFTs became worthless after DraftKings shut down the marketplace in July 2024 due to “legal developments.” The case settled for $10 million, preliminarily approved on February 28, 2025, covering individuals who transacted in DraftKings NFTs from August 11, 2021, to the judgment date. The settlement funds will compensate class members based on calculated losses, with a minimum payout of $5 per claimant.