ICYMI: Magic Eden got the
$ME class claims against it THROWN OUT on a motion to dismiss.
Friendly reminder, a buyer alleged Magic Eden hyped its token, pivoted to a crypto casino, and watched the price fall 98%, from $5.63 to $0.12. He was staking, so he could not sell.
Judge Cogan never reached whether that was deceptive. He dismissed Euclid because the WALLET TERMS WAIVED CLASS ACTIONS, and that waiver killed the only reason those claims were in federal court.
This is Pagan v. Euclid Labs, 1:26-cv-03608, Eastern District of New York.
Euclid runs Magic Eden. About two years ago it launched
$ME and sold it as the official token: cross-chain use, governance, buybacks, airdrops, staking rewards. Some of that showed up. Then CEO Jack Lu announced the pivot to Dicey, a crypto casino and sportsbook.
$ME got pulled back to Solana. Bitcoin and EVM uses shut down. NFT buybacks stopped. The proprietary wallet closed. Holders who had staked were locked in for the drop.
Plaintiff Jaime Pagan put in about $2,000 and sued under New York consumer law, plus negligent misrepresentation and unjust enrichment, on behalf of a class.
Federal court only because of the Class Action Fairness Act.
The problem is the wallet terms he agreed to -
“YOU AND EUCLID LABS AGREE THAT EACH MAY BRING DISPUTES AGAINST THE OTHER ONLY IN YOUR OR ITS INDIVIDUAL CAPACITY, AND NOT AS A PLAINTIFF OR CLASS MEMBER IN ANY PURPORTED CLASS.”
Cogan held the wallet is “a centerpiece of the complaint,” so the terms count even though they were not attached. No class claim, no CAFA, no subject-matter jurisdiction. He also refused to keep the individual claims against Euclid alive inside a class case against the executives. That, he wrote, would “end run the class action waiver.”
Co-founder Zhuoxun Yin is out too, on personal jurisdiction. A 2022 pizza video and a 2024 yacht party in New York do not do it. The statements actually tied to him were true, and a true statement is not a misrepresentation.
This is a pleadings dismissal, not a finding that the pivot was fine.
Other defendants, including Lu, are still in the caption. Euclid and Yin are not.