Midnight Hub NFT Lawsuit: Hermann v. Veluz-Nepomuceno
Midnight Hub ROOMS and Digital Nomads NFT class action against Veluz-Nepomuceno and Ong. Burwick Law represents investors.
On November 5, 2024, a class action complaint was filed in the United States District Court for the Northern District of California, captioned Hermann v. Veluz-Nepomuceno, Case No. 3:24-cv-07704, alleging that the founders of the Midnight Hub project sold NFTs through misleading statements and material omissions, then abandoned the project after raising substantial funds. The complaint names four defendants: Brian Veluz-Nepomuceno, the CEO of both Rooms.tv and Midnight Hub; Percival Ong, the CFO and COO of both entities; Midnight Hub, a California corporation; and Rooms.tv, a California corporation based in San Bruno.
According to the complaint, Defendants promoted Midnight Hub as a Web3 ecosystem that would include a community-run streaming platform, a decentralized autonomous organization, and a utility token called $NMDS. To fund development, Defendants created and sold two NFT collections on the Solana blockchain: the Midnight Hub: ROOMS NFTs and the Digital Nomads NFTs. The ROOMS NFTs were sold beginning January 15, 2023 through the Magic Eden marketplace, generating between 12,329 and 12,625 $SOL for Defendants. The Digital Nomads NFTs launched in October 2023, raising approximately 13,250 $SOL. Defendants allegedly told purchasers that holding both NFT collections would unlock staking rewards, a 25% profit share from the platform, exclusive creator access, and airdrops of additional digital assets. Each NFT also carried an embedded 5% royalty on secondary sales payable to Defendants.
The complaint alleges that shortly after raising these funds, Defendants went silent. Their final social media post was on November 8, 2023. No streaming platform was delivered. No staking mechanism was deployed. No profit sharing occurred. The project website and Discord channel were deleted. When plaintiff’s counsel sent a demand letter in October 2024, Defendant Ong responded not with a reply but by signing dissolution certificates for both Midnight Hub and Rooms.tv, each stating under penalty of perjury that the corporations had never incurred any known debt or liability. The value of the NFTs declined to near zero.
The complaint asserts five causes of action: sale of unregistered securities under Sections 5 and 12(a)(1) of the Securities Act, material misstatements and omissions under Section 12(a)(2) of the Securities Act, control person liability under Section 15 of the Securities Act, and, in the alternative, violations of the California Consumer Legal Remedies Act and the California Unfair Competition Law. The complaint seeks compensatory and rescissory damages, disgorgement, attorneys’ fees, and other equitable relief on behalf of all purchasers of Midnight Hub: ROOMS NFTs and Digital Nomads NFTs during the class period of January 15, 2023 through March 31, 2024.
Burwick Law, PLLC
1 World Trade Center, 84th Floor
New York, NY 10007
(646) 762-1080
burwick.law