Key Takeaways:
- DraftKings has ceased its NFT operations due to a federal court ruling that its NFTs might be considered securities.
- A class action lawsuit led to the immediate discontinuation of DraftKings’ Reignmakers fantasy sports game and NFT Marketplace.
- The broader NFT market is facing a downturn, with sales in July 2024 significantly lower than in March 2024.
DraftKings has ceased its nonfungible token (NFT) operations due to legal challenges.
This decision follows a federal court’s ruling that DraftKings-issued NFTs might be considered securities under the Securities Act and Exchange Act.
Draftkings is terminating support for their Reignmakers NFT.
— DiamondCruiser.eth (@Diamond_Cruiser) July 31, 2024
This why I never supported the web3 gaming "own your assets" myth.
When the game dies, so does your NFTs. Same as in web2. It's not a reason to go to web3 and most games that focus on that will fail. pic.twitter.com/ITFkSv5BvU
A class action lawsuit alleged the NFTs were unregistered securities, leading the court to deny DraftKings’ motion to dismiss.
Consequently, DraftKings announced the immediate discontinuation of its Reignmakers fantasy sports game and NFT Marketplace.
Users can still access and transfer their assets.
DraftKings launched its NFT marketplace on the Ethereum layer 2 Polygon network in 2021 but faced legal issues in March 2023.
Wow! 👀@DraftKings @DKReignmakers has been discontinued, effective immediately. pic.twitter.com/z6AjPLZTJx
— Tyler Tamboline (@ToeTagginTambo) July 30, 2024
A court ruled in July 2023 that the NFTs could be seen as investment contracts.
The NFT market is also experiencing a downturn, with July 2024 sales significantly lower than the March 2024 peak.
Similar legal issues are affecting other NFT projects like Dapper Labs’ NBA Top Shot.
About The Author
Fleming Airunugba, a seasoned Web3 and crypto content expert, leverages his deep understanding of blockchain technology to bring the latest and most impactful news to the crypto community.
With a knack for engaging storytelling and strategic content creation, Fleming is dedicated to educating and inspiring his audience with insightful analysis on cryptocurrencies, NFTs, and the future of digital finance.
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