Nelk Boys face class action over $23M NFT project

The Nelk Boys are facing a class-action lawsuit alleging they failed to fulfill promises related to their Metacard NFT project, which generated $23 million in sales.

Filed on January 29 in a California federal court by Trenton Smith, the lawsuit accuses Kyle Forgeard, John Shahidi, and their associated firms of being “snake-oil salesmen masquerading as entrepreneurs.”

The complaint claims that while the Nelk Boys offered a few perks with the Metacard NFTs, such as discounts on merchandise and access to an event featuring rapper Snoop Dogg, they ultimately did not deliver on promised business ventures or investment opportunities.

According to the lawsuit, the Nelk Boys minted 10,000 NFTs in January 2022, selling each for $2,300.

However, the NFTs reportedly held no intrinsic value beyond the advertised amenities.

As of now, the floor price for a Metacard on the OpenSea marketplace is approximately 0.034 Ether, equivalent to about $111.

The lawsuit alleges that holders of the Metacards have seen no return on their investment despite the substantial funds raised.

Smith is seeking damages and restitution for NFT holders who feel misled by the promises made during the project launch.

The Nelk Boys have not yet responded to requests for comment regarding the lawsuit.

This legal action follows a trend of lawsuits against NFT projects that fail to deliver on their promises, including a recent case involving OpenSea.

The broader NFT market continues to struggle with declining trading volumes and interest, with 2024 being reported as one of the worst years for NFT sales since 2020.