In brief
- Owners of BIG3 NFTs have sued Ice Cube's 3-on-3 professional basketball league over allegedly unfulfilled promises.
- NFT purchasers, who paid as much as $25,000 apiece, expected to earn a share of team sales and get other benefits.
- The suit alleges they haven't, and seeks damages and restitution as BIG3 aims to go public via SPAC deal.
NFT buyers expecting to have some ownership stake in professional 3-on-3 basketball teams from rapper and actor Ice Cube’s BIG3 league have filed a class action lawsuit against the league in the Superior Court of California—challenging the league’s past promises as it prepares to go public.
The suit, filed last July but first reported by Front Office Sports and publicized by attorneys on Tuesday, alleges “deceptive, fraudulent, and illegal marketing” by the league as part of its “offering and sale of unregistered securities in the form of non-fungible tokens.”
“At its core, this case is about promises made to investors who are also the league’s most loyal fans," said the attorney for the plaintiffs, Joseph Sakai, in a statement.
"Our clients invested substantial sums based on representations that they would receive meaningful ownership rights, including team management decisions, season tickets, and financial participation in future team sales," Sakai said. "The league promised these rights would last ‘forever.’ They barely lasted three years."
The ownership rights the plaintiffs expected were part of perks from the 2022 sale of Ethereum-based NFTs from two tiers—”Fire” which was sold for $25,000 apiece, and “Gold,” which sold for $5,000 each. BIG3 NFT owners were also expected to receive benefits like VIP tickets and the ability to vote on team matters.
“This is a great way for the fans to be owners. And so, it's a no-brainer for me,” Ice Cube told Decrypt at the time. “I'm all about changing the game and shifting the paradigm.”
But the NFT purchasers allege that ownership, its benefits, and other promises, have not been met.
“Rather than honor its contractual promises to plaintiffs and other similarly situated investors who provided substantial capital to the league, BIG3 has relegated those individuals from team owners to common ticket holders,” the suit says, adding that it ultimately denied plaintiffs' rights to participate in the league and profits from the sale of teams, things it promised “in return for their purchase of BIG3’s unregistered securities."
BIG3 sold four teams to outside investors in 2024, netting around $40 million in the process. The suit alleges a portion of those team sales was due to NFT holders, who were some of the original private investors in the league.
“Two years before BIG3 announced its first sale of team rights to DCB Sports, BIG3 had sold ownership rights to hundreds of private investors, including plaintiffs, via non-fungible tokens,” the suit reads.
A representative for the league did not immediately respond to Decrypt’s request for comment, but told Front Office Sports in a statement that “the plaintiffs are filing a public nuisance suit despite contractual obligations to resolve all such disputes through confidential arbitration.”
Plaintiffs are seeking damages, restitution, declaratory relief, and other reliefs. According to a statement from the plaintiff’s attorney, BIG3 has sought to deal with the matter via private arbitration on an individual basis, as opposed to a class.
Last month, the league—which recently began its ninth season—announced that it is seeking to go public via a merger with a special purpose acquisition company (SPAC) that would value it around $290 million. The plaintiffs' attorney expects to add an amendment to the lawsuit in light of the SPAC news, according to Front Office Sports.
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