DraftKings (DKNG) $10M Investor Settlement
DraftKings ($DKNG) has agreed to settle $10M with investors to resolve claims that it operated an unregistered securities exchange and hid the nature of its NFTs sold on the DraftKings Marketplace.
Outline
In 2021, DraftKings launched the sale of its NFTs, restricting the resales to its own marketplace. These restrictions raised concerns about the liquidity and long-term value of the NFTs as potential regulatory violations. Following this, DraftKings faced a lawsuit from investors over selling unregistered securities.
Timeline
August 11, 2021 – DraftKings launched its NFT marketplace, offering digital collectibles featuring athletes.
2022 – DraftKings restricted NFT resales to its platform, limiting liquidity and market value. Reports surfaced about potential regulatory violations, increasing uncertainty around the NFTs’ status as securities.
March 2023 – Investors filed a lawsuit, alleging that DraftKings’ NFTs were unregistered securities.
February 26, 2025 – DraftKings agreed to a $10 million settlement to resolve investor claims.
Background
In August 2021, DraftKings launched its NFT Marketplace, allowing users to buy and sell digital collectibles featuring professional athletes. The company promoted these NFTs as valuable assets, attracting buyers who expected to profit from reselling them.
However, investors later discovered that DraftKings restricted NFT transactions to its own platform, preventing users from transferring or selling their assets on external marketplaces.
Additionally, investors found out that the company marketed these NFTs as investments while failing to register them as securities, making it difficult for buyers to assess the risks involved.
By March 2023, investors filed a lawsuit accusing DraftKings of operating an unregistered securities exchange and misleading them about the NFTs’ resale potential.
What Can Investors Expect Now?
DraftKings ($DKNG) has agreed to settle $10M with investors to resolve claims that it operated an unregistered securities exchange and hid the nature of its NFTs sold on the DraftKings Marketplace.
If you were affected by this situation, you may be eligible to file for a payout and receive your share of the settlement. Check the FAQ section below for details on eligibility and claims.
Frequently Asked Questions
All persons who purchased or otherwise acquired publicly traded DraftKings NFTs in a DraftKings account during the period from August 11, 2021, through the present, and were damaged thereby.
No, if you have purchased securities within the class period, you are eligible to participate.
You can participate in the settlement and retain (or sell) your securities.
The entire process usually takes 4 to 9 months after the claim deadline. But the exact timing depends on the court and settlement administration.
11thestate is an investor recovery company, we help investors to track and collect securities class action settlements. We will:
1. Prepare documents for your payout
2. Audit the claim and make sure you get the maximum possible payout
3. File a claim with the settlement administration
4. Correspond with the settlement administration to resolve emerging issues
5. Deliver payout directly to your brokerage account
There is no upfront cost, but we will deduct 20% of the recovered amount as a commission for our services.