Dapper Labs settles for $4 million, NBA NFTs are considered non-securities.
Video game developer Dapper Labs A class action lawsuit was settled for $4 million. According to documents filed in New York District Court.
The investor group launched the lawsuit in 2021, alleging that the company: NBA Top Shot Moments sold unregistered securities via non-fungible tokens (NFTs).
CEO Roham Gharegozlou claims that the agreement confirms that: NBA NFTs do not qualify as securities.
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On June 4, Gharegozlou took to social media to explain that the legal findings had been established. NFTs are part of a “decentralized public network.” This ensures that they are “not securities in the same way that trading cards are.”
The agreement states: If the plaintiffs withdraw their claim that NFTs are securities, Dapper Labs will pay $4 million.
Additionally, the company must Implement changes to ensure that the Flow blockchain is sufficiently decentralized. This includes transferring the remaining Flow tokens it controls to the Flow Foundation and introducing an annual training program for employees on federal securities laws.
agreement despite agreement It still needs approval from District Judge Victor Marrero. In February 2023, Judge Marrero denied Dapper Labs’ motion to dismiss the lawsuit, suggesting that NFTs could be considered securities.
Rather, it is the specific plan in which Dapper Labs provides Moments that creates a sufficient legal relationship between investors and promoters to enter into an investment agreement and create security thereunder, according to Howey.
Nonetheless, the agreement reinforces Dapper Labs’ position that NBA NFTs are not securities and includes measures to ensure decentralization and compliance with securities laws.
In other news, Dapper Labs previously collaborated with Disney to create Disney Pinnacle, an NFT platform.
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