GRSM Partners Peter Siachos, Clair Wischusen, and Travis Richins, together with Associate Bates Holman, secured a significant victory before the U.S. District Court for the Southern District of Florida, obtaining an order compelling arbitration on an individual basis and staying a putative nationwide class action against Game of Silks, a blockchain-based virtual horse racing platform built around non-fungible tokens, cryptocurrency-enabled transactions, digital avatars, virtual land, and other metaverse-style assets.
The lawsuit, Cantner v. Game of Silks, Inc. et al., arose from the purchase of digital assets allegedly tied to the Game of Silks virtual horse racing platform, through which users could acquire tokenized interests in virtual representations of real-world racehorses, along with related in-game assets such as stables, land, and avatars, and allegedly earn rewards tied to platform participation and racetrack performance. The plaintiff sought to prosecute a putative class action on behalf of all purchasers of the platform’s non-fungible tokens (NFTs), asserting federal securities claims, as well as claims under the Florida Deceptive and Unfair Trade Practices Act and for unjust enrichment.
GRSM moved to compel arbitration based on the platform’s clickwrap Terms and Conditions, which contained a mandatory arbitration clause, a class action waiver, a Delaware choice-of-law provision, and JAMS rules delegating gateway questions of arbitrability to the arbitrator. GRSM argued that the plaintiff agreed to those terms when registering for and transacting on the platform and that the dispute, therefore, had to proceed, if at all, in individual arbitration rather than in federal court as a class action. GRSM further argued that the arbitration provision could be enforced not only by the signatory platform entity but also by certain nonsignatory former officers and related entities under principles of equitable estoppel because the complaint repeatedly alleged concerted misconduct by all defendants arising from the same alleged course of conduct.
The court agreed. In a detailed opinion, the court held that defendants established the existence of a valid clickwrap agreement by a preponderance of the evidence through sworn declarations from witnesses with personal knowledge of the platform’s sign-up architecture and rewards systems, as well as screenshots showing that users could not create an account or receive rewards without affirmatively checking a box accepting the terms. The court also held that the terms’ incorporation of JAMS rules constituted a clear delegation of threshold arbitrability issues to the arbitrator. The court further ruled that the nonsignatory defendants could invoke the arbitration clause under equitable estoppel because the complaint alleged substantially interdependent and concerted misconduct by both signatories and nonsignatories, repeatedly referring to “Defendants” collectively in challenging the marketing, operation, and collapse of the NFT platform. Based on those findings, the court compelled arbitration of all claims on an individual basis and stayed the federal litigation, effectively preventing the case from proceeding as a class action in federal court.
The ruling is an important win not only because it halted a putative class action at the courthouse door but also because it did so in a technologically complex setting involving digital assets, blockchain-based transactions, tokenized virtual property, and novel consumer-facing theories attempting to recast NFT ecosystem participation as securities and consumer-fraud litigation. The decision underscores that even in cutting-edge disputes involving emerging technologies and digital platforms, traditional contract principles still matter. Well-designed clickwrap agreements, properly supported with system evidence and witness declarations, remain a powerful tool for enforcing arbitration rights and defeating class-based litigation at the outset.
