Dapper Labs Settles $4 Million Class Action Over Top Shot NFTs

Dapper Labs Settles $4 Million Class Action Over Top Shot NFTs

Dapper Laboratoriesthe company behind Best shot in the NBAhas agreed to a $4 million settlement in a class action lawsuit that claimed its NFTs were unregistered securities.

The processwhich began in 2021, was brought by clients who argued that NFTs should have been registered under securities laws.

The settlement, disclosed in court documents on Monday, includes payments to the plaintiffs and coverage of their legal fees. As part of the settlement, the plaintiffs will abandon any future claims that NBA Top Shot NFTs are securities.

Source: Dapper Laboratories

Decentralizing the Dapper Labs NFT Ecosystem

Last February, a federal judge ruled the case could proceed, noting that NBA Top Shot NFTs are staying in Flow, a blockchain developed by Dapper Labs. The judge considered Flow to be a “private” blockchain, unlike more decentralized networks like Bitcoin or Ethereum.

In response to the lawsuit, Dapper Labs made changes to decentralize its operations. As part of the agreement, the company relinquished ownership of all $FLOW tokens earmarked for the Ecosystem Reserve to the independent Flow Foundation.

Dapper Labs has previously addressed other demands, such as allowing third-party marketplaces to trade Top Shot NFTs.

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