Dolce & Gabbana Wins $25M Legal Battle Over DGFamily NFT Rights
Dolce & Gabbana USA Prevails in Class-Action Lawsuit Over NFT Initiative
Overview of the DGFamily NFT Controversy
Dolce & Gabbana USA has successfully defended itself in a significant legal dispute concerning its $25 million DGFamily non-fungible token (NFT) project. The class-action lawsuit, initiated in May 2024 and amended in September, alleged that the luxury fashion brand and its Dubai-based collaborator, UNXD, failed to fulfill the promised benefits associated with the NFT collection.
A federal court in New York dismissed the case against Dolce & Gabbana USA, citing insufficient evidence to link the U.S. subsidiary to the actions of its Italian parent company, Dolce & Gabbana SRL.
Background of the DGFamily NFT Initiative
Launched in April 2022, the DGFamily NFT project was a collaboration between Dolce & Gabbana, UNXD, and inBetweeners. It aimed to offer consumers exclusive digital and physical rewards, including metaverse wearables, luxury fashion items, and access to VIP events. The initiative successfully sold over 5,000 NFTs, generating millions in revenue.
Prices for these NFTs ranged from 1.224 ETH to 40 ETH, equivalent to approximately $3,600 to $120,000 at the time of launch. However, plaintiffs claimed that only two out of eight promised benefits were delivered, with many items arriving damaged and unexpected shipping and customs fees incurred. By late 2023, the project was deemed a failure, prompting legal action.
Details of the Lawsuit and Allegations
The class-action lawsuit, spearheaded by Luke Brown, who claimed a loss of $5,800 on a DGFamily NFT, accused Dolce & Gabbana and UNXD of deceptive advertising and failing to provide the promised benefits. The complaint argued that Dolce & Gabbana USA and its Italian counterpart operated as a single entity due to shared leadership, employees, and branding. It also alleged that the NFTs were marketed as unregistered securities and that artificial demand was created through manipulation of secondary markets.
Court Ruling and Justifications
In January 2025, Dolce & Gabbana USA sought to have the lawsuit dismissed, asserting that it was a distinct legal entity unrelated to the marketing, sale, or development of the NFT project. U.S. District Judge Naomi Reice Buchwald concurred, stating that the evidence was inadequate to classify Dolce & Gabbana USA as an “alter ego” of its Italian parent. The judge noted that the lawsuit’s reference to “Dolce & Gabbana” for both parties failed to clarify their respective roles, rendering the case “plainly insufficient” to prevent dismissal.
Implications and Future Considerations
The future of the lawsuit remains uncertain, as other defendants, including UNXD and Bluebear Italia SRL, have not been served with the complaint. Judge Buchwald indicated that further amendments to the complaint might not strengthen the case, potentially undermining its viability.
This ruling highlights the challenges of holding international corporations accountable in NFT-related disputes and may set a precedent for similar cases in the expanding cryptocurrency sector. While Dolce & Gabbana USA has been cleared of liability, questions linger regarding the accountability of the Italian parent company and its partners. This situation underscores the difficulties investors face in recovering funds when digital asset ventures fail to meet their commitments, reflecting the ever-evolving landscape of crypto and NFTs.
