NFT Investors Left Hanging as Dolce & Gabbana USA Dodges $25 Million Lawsuit

NFT investors are reeling after a US federal judge dismissed Dolce & Gabbana USA from a high-profile $25 million class-action lawsuit. The decision leaves many buyers uncertain about their chances of recovering lost funds from the luxury brand’s NFT project.

The lawsuit targeted the DGFamily NFT collection, which promised buyers exclusive digital and physical perks. But with the US arm now cleared, the future of the case and investor compensation is in serious doubt.

What does the court’s decision mean for NFT investors?

Judge Naomi Reice Buchwald’s ruling on Friday removed Dolce & Gabbana USA Inc. from the lawsuit, stating it was not an “alter ego” of its Italian parent company. This move significantly weakens the investors’ legal position.

The class-action suit, filed in May 2024 and updated in September, accused both Dolce & Gabbana and its US arm of failing to deliver on the DGFamily NFT project’s promises. Investors claim the brand kept over $25 million from NFT sales while not providing the advertised benefits.

Did you know?
Dolce & Gabbana’s DGFamily NFT collection was among the first major luxury brand NFT projects to promise both digital and real-world perks to buyers, including exclusive access to events and metaverse wearables.

Can Dolce & Gabbana’s Italian parent still be held liable?

The Italian parent company, Dolce & Gabbana SRL, remains named in the lawsuit. However, it has not been formally served with the complaint, along with other international defendants like Dubai-based UNXD Inc. and Bluebear Italia SRL.

Legal experts say that without a US-based defendant, the path to holding the Italian company accountable is much more challenging. International service and jurisdiction issues could drag the process out for months or even years.

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Judge says lawsuit failed to separate US and Italian companies

Judge Buchwald found that the plaintiffs did not provide enough evidence to distinguish the actions of Dolce & Gabbana USA from those of its Italian parent. The complaint referred to both entities as “Dolce & Gabbana,” making it difficult to assign blame.

Although the lawsuit cited overlapping executives and shared office space, the judge ruled these factors were not enough to prove the US arm was involved in the NFT project. The court emphasized the need for specific examples linking the US entity to the alleged misconduct.

Investors left in limbo after US arm cleared

With the US arm dismissed, NFT holders are left with few immediate options. Many had purchased DGFamily NFTs expecting quarterly benefits over two years, including digital outfits for the metaverse, physical clothing, and exclusive live events.

The court’s decision has sparked frustration among investors, who feel abandoned by both the brand and the legal system. Some fear that the case could collapse entirely if the remaining defendants are not brought before the court.

While the Italian parent company and other international defendants remain named, the lack of US jurisdiction poses a major obstacle. The outcome of this case could set a precedent for future NFT lawsuits involving global brands.

As the legal battle continues, NFT investors are demanding greater transparency and accountability from luxury brands. The next steps in court will determine whether digital asset buyers can trust high-profile projects in the future.