Nfts
Dapper Labs settles NBA Top Shot NFT lawsuit for US$4 million
Dapper Labs, the blockchain company behind NBA Top Shot collectibles, has settled a US$4 million class action lawsuit over alleged securities law violations.
Pending court approval, the settlement will compensate the plaintiffs and cover legal costs, providing Dapper Labs with a clearer legal framework to continue its operations.
If approved, the plaintiffs can no longer claim that Dapper Labs’ NBA-themed NFTs are securities.
“After discovery, it was understood and agreed that @Flow_blockchain is a decentralized public network and that digital collectibles like @NBATopShot are not securities in the same way that trading cards are not securities,” said Roham Gharegozlou, CEO of Dapper Labs, in a statement. statement on X.
“Today’s resolution keeps us focused on what matters: creating great experiences for our fans.”
The legal challenge, filed in the U.S. District Court for the Southern District of New York, claimed that NBA Top Shot Moments should be classified as unregistered titles, tying their value to the platform’s success.
The plaintiffs also claimed that Dapper Labs manipulated the market and delayed withdrawals.
The case gained a lot of attention when a federal judge allowed it to continue, indicating that Top Shot NFTs could meet the criteria for a securities offering.
This was in part because NFTs are hosted on the Flow blockchain, created by Dapper Labs, which the judge deemed less decentralized than networks like Bitcoin or Ethereum.
As part of the deal, Dapper Labs will implement business changes, including transferring FLOW tokens to the independent Flow Foundation and allowing third-party marketplaces to sell Top Shot NFTs.
These measures, aimed at improving market fairness and withdrawal processes, were already in place before the settlement was concluded.