Nelk Boys Seek Dismissal of Metacard NFT Fraud Lawsuit

Defense attorneys for YouTubers Kyle Forgeard and John Shahidi, collectively known as the Nelk Boys, have filed a motion to dismiss a class action lawsuit alleging fraud related to their Metacard NFT project. The lawsuit, filed in January, claims that buyers were misled by promises of exclusive perks and community access tied to the Metacard NFT. The defense argues that the plaintiff declined a full refund and received the promised perks, rendering the case legally moot.

The lawsuit centers on allegations that the Nelk Boys misrepresented the Metacard program before its January 19, 2022, sale, inducing the plaintiff to purchase a token. It is also claimed that the defendants continued to make misleading statements after the NFTs were sold, delaying the realization of the alleged deception. The complaint states that these false and misleading statements were widely distributed through various promotional materials, including press releases, social media posts, YouTube videos, and podcasts.

In their motion filed on April 17 in the U.S. District Court for the Central District of California, the defense for the Nelk Boys contended that the complaint fails to meet basic fraud standards. They argued that after the broader NFT market collapsed, the defendants offered every Metacard holder, including the plaintiff, a full refund plus interest, thereby mooting the claims. The defense asserted that the plaintiff's regret over the purchase and refusal of the refund do not constitute fraud, and thus the complaint should be dismissed.

The Nelk Boys, founded by Forgeard and Jesse Sebastiani in 2010, are known for their prank videos and a party-themed brand that includes the Full Send podcast, merchandise, and alcoholic beverages. They have a significant online presence with 8 million subscribers on YouTube and 674,000 followers on X. The Metacard NFT project, launched in January 2022, consisted of 10,000 Ethereum NFTs, each sold for approximately 0.8 ETH, around $2,300 at the time, raising roughly $23 million.

The defense highlighted that the complaint did not identify any specific pre-sale misrepresentations, false statements, or evidence that the plaintiff relied on when purchasing the Metacard NFT. They contended that the alleged promises largely matched the perks the plaintiff acknowledged receiving, making the case legally irrelevant. The defense emphasized that the plaintiff's claims hinge on pre-sale statements, which were not specified in the complaint, rendering the allegations legally insufficient.