First-of-Its-Kind: Legal Notice delivered by NFT in a Class Action Settlement

The Challenge

Shomroni v. FEI Labs Inc. was a crypto class action alleging that the defendant sold unregistered securities in the form of “FEI” and “Tribe” tokens, violating the Securities Act of 1933. Unlike traditional securities settlements, no claimant data was available—FEI Labs did not collect information on token purchasers, only blockchain wallet addresses. This required a first-of-its-kind solution to deliver legal notice in a Web3 environment.

Our Solution

We pioneered a crypto-native notice and claims process, leveraging blockchain technology to reach potential claimants:

• NFT-Based Legal Notices: We issued (airdropped) non-transferable NFTs directly to 17,000 wallet addresses, embedding settlement details and claim submission links.
• Community-Based Media Strategy: The settlement notice was posted on FEI Labs’ official Discord, later endorsed by moderators for credibility, with additional targeted ads placed on X (Formerly Twitter) and Reddit.
• Token-Gated Claims Access: Wrote into the code that a wallet had to hold the NFT to submit a claim, preventing fraudulent filings while maintaining ease of access.
• Wallet-Connected API for Verification: Once connected, wallets automatically retrieved and displayed all FEI and Tribe token transactions, ensuring accurate eligibility. If a wallet no longer held FEI tokens, claimants could still submit online by verifying past transactions.
• Multi-Wallet Linking: Users could connect multiple wallets to consolidate their holdings into a single claim.

Results

• Notified 17,000 Wallets via blockchain-based legal notice.
• Three Rounds of Notice ensured broad reach, with reminders for unsubmitted claims.
• 100% Digital Participation—every claim was submitted online, with zero paper claims.
• First-of-Its-Kind Legal Notice: This was the first-ever securities settlement to use NFTs as a legal notice mechanism in a Web3 environment, marking a groundbreaking shift in how legal settlements can be administered for crypto-based assets.

This innovative approach set a new standard for securities settlements in the Web3 space, demonstrating how blockchain can be leveraged for effective, secure, and verifiable legal notice and claims administration.

Want to Learn More About Class Notice Using NFTs?

Our team specializes in Web3-native legal notice solutions designed to reach decentralized communities effectively. Contact us today to explore how NFTs and blockchain technology can enhance your legal notice strategy.