Dapper Labs, the creator of the once-popular NBA Top Shot Moments NFT collection, has settled a class-action lawsuit alleging violations of securities laws related to the sale of digital collectibles. Court documents show the company agreed to pay $4 million to resolve the case.
The settlement funds will go toward a pool accessible to qualifying claimants. "The settlement in the Friel vs. Dapper Labs case further asserts Dapper Labs' conviction that NBA Top Shot Moments are not securities under federal law," Dapper Labs said in a statement.
Dapper Labs Settles NBA Top Shot Lawsuit for $4 Million
Dapper Labs Settles NBA Top Shot Lawsuit
The settlement marks a shift from last year's ruling, when the presiding judge determined that NBA Top Shot Moments NFTs qualified as securities and allowed the Friel vs. Dapper Labs lawsuit to move forward.
Plaintiffs claimed Dapper Labs made hundreds of millions of dollars selling unregistered securities. They also alleged the company manipulated the market for its NFTs and that users struggled to withdraw funds for extended periods. The case was filed in 2021 in the U.S. District Court for the Southern District of New York.
NBA Top Shot Moments NFTs
Positive Outcome
Dapper Labs CEO Roham Gharegozlou, a co-defendant in the lawsuit, called the settlement a win: "We are pleased with the results of today's settlement, which marks a significant step forward for Dapper Labs and the Flow community."
NBA Top Shot NFTs are minted on the Flow blockchain, developed by Dapper Labs. Since March 2022, four additional marketplaces have been authorized to display and sell NBA Top Shot Moments. The expansion gives collectors more ways to trade and enjoy their Moments, with backing from the NBA and the NBA Players Association.
NBA and the NBA Players Association IP
NBA Top Shot, Dapper Labs, and Flow Blockchain
- NBA Top Shot is a blockchain-based platform that allows users to buy, sell, and trade NBA highlight moments. Think your favorite Steph Curry 3-pointer or a Lebron James fastbreak block. The platform launched in 2019 by Dapper Labs with card-collecting gamification mechanics.
- Dapper Labs is a technology company known for developing the Flow blockchain, which powers NBA Top Shot and other blockchain-based applications.
- Flow, like Ethereum, Polygon, or Solana, is a blockchain focused on helping build web3 apps designed for mainstream adoption through frictionless experience.
Global Collectibles Market
In 2023, the Global Collectibles Market hit a valuation of $462 billion, and it keeps growing. Online platforms have made it easier for collectors to buy, sell, and show off their treasures. There's also a strong emotional and nostalgic pull to collectibles that appeals to a broad audience.
Blockchain technology has changed how authenticity and provenance are tracked, easing concerns about counterfeit items and giving collectors more confidence. Collectibles have also become more visible in mainstream pop culture and media, drawing in new enthusiasts eager to jump in.
Global Collectibles Market
Final Thoughts
The resolution of the class-action lawsuit against Dapper Labs and the developments around NBA Top Shot Moments have real implications for web3 gaming. With blockchain technology and NFTs driving innovation in gaming, legal clarity and regulatory compliance matter. The settlement shows how companies navigate gaming, blockchain, and securities laws.
Dapper Labs' expansion of NBA Top Shot's marketplace ecosystem demonstrates the potential for further integration of blockchain in gaming, creating a more inclusive environment for collectors and gamers. These developments highlight the importance of trust, transparency, and innovation as web3 gaming continues to evolve.
