NBA-Branded 'Top Shot Moments' NFTs May Be Securities, Judge Rules in Dapper Labs Case

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A U.S. federal judge has ruled that NBATopShot NFTs from dapperLabs could be considered securities, in violation of securities laws, following a year-and-a-half class-action lawsuit against Dapper Labs and CEO Roham Gharegozlu.

The offering of Dapper Labs’ NBA-branded “Top Shot” non-fungible tokens might be securities, a federal judge ruled Wednesday.

According to the ruling, Dapper Labs’ FLOW tokens – while not necessarily securities themselves – are “necessary to the totality of the scheme at issue.” “Basketball cards are not securities. Pokemon cards are not securities. Baseball cards are not securities. Common sense says so. The law says so. And courts say so,”However, Judge Marrero disagreed in his Wednesday ruling, which denied Dapper Labs’ motion to dismiss the lawsuit.The judge said he found that the first prong, an investment of money, was “adequately pled,” noting neither party had an objection to that prong.

Marrero added that the “purchasers’ fortunes were tied to the overall success of Dapper Labs,” because Dapper Labs controlled the Flow Blockchain as well as the online marketplace where the Moments were sold and traded. “As to the allegations here, the Court finds that Defendants’ public statements and marketing materials objectively led purchasers to expect profits,” the judge wrote, using screenshots of Top Shot tweets as examples.

 

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NBATopShot dapperlabs Damn time to bury the magic cards

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NBATopShot dapperlabs SECGov You are beyond ridiculous

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