NFTs
Dolce & Gabbana under fire in class action lawsuit over botched NFT deliveries
NFTs do not have the same level of influence as they did a few years ago, and the consequences of the boom – and bust – of the mainstream NFT market continues to plague some brands that have taken action. The number of companies under scrutiny for their NFT strategy has grown this month to include Dolce & Gabbana.
O Lux fashion brand was named defendant in a class lawsuit claiming that by selling NFTs, it made promises that it did not keep. The complaint also names UNXD, an NFT marketplace that allegedly facilitated Dolce & Gabbana NFT launches and transactions, as a defendant.
Lead plaintiff Luke Brown filed the case in the Southern District Court of New York earlier this month, alleging that he purchased Dolce & Gabbana NFTs called DGFamily. According to the complaint, Brown spent $6,000 on DGFamily assets under the guise that “purchasers would later receive benefits, including, among other things, digital rewards, physical products, and exclusive access to events.”
But according to Brown and his lawyer, he never received most of the benefits promised by Dolce & Gabbana – and the delivery of the NFTs was delayed.
According to the complaint, “[Dolce & Gabbana] never provided a complete set of products [Brown] secured through its digital asset purchases, despite repeatedly promising that the products would be delivered, while inevitably continuing to push back the delivery date.”
According to court documents, the launch of the NFTs was delayed because the products were not accepted on the UNXD marketplace, which the companies did not disclose to investors at the time. In June 2022, companies announced the first of eight benefits that investors should receive, says Brown.
“The first release… consisted of digital clothing that could only be worn on a metaverse platform with almost no users, called Decentralized,” the complaint states.
A claim metaverse what users have long maintained is that the platforms do not support the transferability of digital assets – so, for example, if a user has a digital asset on Decentraland, they will not be able to transfer that asset to Roblox, another metaverse platform. This appears to be a complaint among DGFamily investors, according to Brown’s complaint. Brown further alleges that Dolce & Gabbana and UNXD failed to obtain proper permissions from Decentraland management before releasing their releases, which caused a delay for investors interested in using the digital products.
A later delivery, which the complaint says the companies call the “Realtà Parallela collection,” was created to send real-life products to investors, Brown claims; But, according to the complaint, many investors never received their packages and those who did were forced to pay customs and customs fees.
Brown claimed he lost $5,800 – nearly 97% of his supposed original investment – because the value of DGFamily’s NFTs depreciated too quickly. The class action lawsuit he initiated accuses Dolce & Gabbana and UNXD of fraud, breach of contract, negligence and more.
The complaint alleges that Dolce & Gabbana “manipulated the digital currency market for DGFamily products to its benefit by executing a ‘rug pull’.”
In the type of transaction that Brown discusses throughout the case, a rug pull typically refers to a company that profits from consumers’ cryptocurrency investments, canceling a project after the currency is in, but without delivering the so-called benefits that an NFT had been commercialized. how to allow access to.
And Brown believes that in this case, Dolce & Gabbana and UNXD did just that, saying the companies made the choice to “abandon” the project almost entirely.
“Based on information and belief, the defendants made a business decision to forgo an expensive and time-consuming process to complete or support the DGFamily project and instead deliberately undertook a scheme to defraud [Brown] and other consumers,” the complaint alleges, adding that the companies’ “standard operating procedure has been to promise products that they fail to deliver, before abandoning a project and a community they promised to support.”
This case is far from Dolce & Gabbana’s only questionable business practice as far as consumers are concerned. In 2018, the brand faced heavy scrutiny for what many called racist ads in its Chinese market, which was only compounded by screenshots of Instagram direct messages with more derogatory comments about China, which allegedly came from Stefano Gabbana, the company’s co-founder.
Even before that, the company had already left an unpleasant taste in consumers’ mouths, calling one of its products “Slave Sandals” in 2016, according to New York Magazine, and, in 2012, sending white models to the catwalk with earrings that they remembered the statues of Blackamoor, which, according to the Guardian, “became an image that romanticized slavery and plantation life”.
Neither Dolce & Gabbana nor Brown’s attorney responded to Sourcing Journal’s request for comment.