‘Rug Pull’: Dolce & Gabbana NFT Lawsuit Filed Over ‘Abandoned’ DGFamily Crypto Project

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Dolce & Gabbana faces a proposed class action lawsuit that alleges the luxury fashion brand pocketed more than $25 million used to fund a now-abandoned non-fungible tokens (NFTs) project while thousands of investors were left with “little to show for their investments.”

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The 51-page NFT lawsuit says the Dolce & Gabbana “DGFamily” NFTs simply did not have the characteristics, uses or benefits the company advertised and promoted and that D&G, “[e]ither through reckless incompetence or greed,” never provided the complete set of NFTs that investors paid for. 

Per the suit, the DGFamily project was based on Dolce & Gabbana’s brand popularity, which the company used to sell digital assets that would secure for investors a set of high-value benefits to be delivered over two years. Among the promised digital assets were NFTs, one-of-a-kind digital items that can be transferred on the blockchain, the lawsuit says.

The case alleges Dolce & Gabbana and co-defendants UNXD, Inc. and inBetweeners “cajole[d]” the plaintiff and other investors into buying into the DGFamily project and then, despite repeated assurances otherwise, “failed to ever provide a complete set of benefits as promised.” These benefits were to include a combination of digital wearables for use in a metaverse app called Decentraland; physical D&G clothing; and/or live events that purchasers of multiple boxes could attend, the filing states.

According to the suit, Dolce & Gabbana’s sale of DGFamily digital assets violated the federal Securities Exchange Act of 1934.

“Defendants never had a right to solicit investments from the public related to DGFamily Products,” the lawsuit alleges. “The DGFamily Products were created to serve as a fraudulent vehicle solely to enrich Defendants’ founders, promoters, managers, and affiliates.”

As the case tells it, the defendants’ promotions of the DGFamily products led thousands of people to pay for allegedly fraudulent securities while the companies at the same time manipulated the price of the DGFamily assets by using investors to drive up prices, all before the defendants delivered even 75 percent of what they promised.

According to the lawsuit, Dolce & Gabbana, UNXD and inBetweeners executed a “rug pull” on investors given that the companies solicited funds from prospective NFT buyers by promising certain benefits and then abruptly abandoned the project while fraudulently keeping the money.

“After selling their DGFamily Products, Defendants, [sic] transferred millions of dollars’ worth of purchasers’ cryptocurrency to, among other places, wallets controlled by Defendants,” the lawsuit summarizes.

The case looks to cover all persons in the United States who bought DGFamily products from April 24, 2022 through May 16, 2024.

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