According to Decrypt, a U.S. District Court judge in Massachusetts rejected DraftKings' motion to dismiss a class action lawsuit alleging that its NFTs were unregistered securities. The plaintiff in this case claimed that DraftKings' sports-themed NFTs met the three criteria of the Howey test and could be classified as securities. The case is now being presided over by Judge Denise Jefferson Casper and may become an important milestone for the NFT industry. The lawsuit was filed in March 2023 and involves DraftKings' NFTs on the Polygon blockchain.
According to CryptoSlam, as of the second quarter of 2024, NFT sales fell 45% from the previous quarter, with total sales of approximately $2.28 billion, the lowest level since the third quarter of 2023. Despite the market downturn, the NFT ecosystem continues to evolve, with brands and companies exploring diverse applications. If NFTs are classified as securities, it could have a significant impact on the way companies create and market these digital assets, and brands may need to reconsider their NFT strategies to ensure compliance, which could inhibit innovation.