Magic Eden, the NFT marketplace that once became one of Solana's breakout apps during the NFT boom, is now facing a proposed class action over claims that buyers were misled about the utility of its ME token.
- The lawsuit, Pagan v. Lu, was filed on June 16 in the U.S. District Court for the Eastern District of New York by plaintiffs Jaime Pagan, Ariel Ruano and Chris Sadowski, but it appears to have drawn wider attention only now.
- The defendants include Magic Eden co-founders Jack Lu, Zhuoxun Yin, Sidney Zhang and Zhuojie Zhou, along with Euclid Labs, the company doing business as Magic Eden, and the ME Foundation.
The lawsuit argues Magic Eden and the ME Foundation promoted ME as more than just another airdropped token.
According to the complaint, buyers were told the token would sit at the center of a growing online asset marketplace with multi-chain support, governance through ME DAO, staking rewards, revenue sharing and token buybacks.
- But the plaintiffs allege many of those features were delayed or never delivered.
What was ME token for
The ME token was launched in December 2024 and pitched by the ME Foundation at the time as the token that would let users earn rewards and participate in governance as well as use Magic Eden across different L1 networks, including Solana and Bitcoin.
But in March of this year, Magic Eden said it would wind down marketplace support for EVM chains and Bitcoin, discontinue its remaining Bitcoin services and shut down the Magic Eden Wallet. Its Solana marketplace and Packs products stayed live.
- While the exact reason behind that retreat remains unclear so far, Magic Eden said then that it was entering "a new chapter" focused on finance and entertainment.
- For ME buyers, though, the lawsuit argues, the retreat undercuts the original cross-chain token story.
Amid changed promises, the ME token has also been brutal for holders. Data from CoinGecko shows ME hit an all-time high of $17 shortly after its launch in 2024 and is now down about 99.7% from that peak.