NFTs
NBA NFT Creator Dapper Labs Settles Securities Infringement Lawsuit for $4 Million: ‘Pleased with Results’
June 4, 2024 2:15 am | 2 minutes of reading
In a significant development, Dapper Laboratoriesthe creator of NBA NFT Best Shot Moments collection, agreed to a $4 million settlement in a class action lawsuit.
What happened: The settlement fund will be available to eligible claimants, according to court documents provided by Dapper Labs, The block reported.
The lawsuit, originally filed in the U.S. District Court for the Southern District of New York in 2021, accused Dapper Labs of making significant profits by selling unregistered securities and artificially supporting the market for its NFTs.
“The agreement in the Friel vs. Dapper Labs further affirms Dapper Labs’ belief that NBA Top Shot Moments are not securities under federal law,” the company said. This statement comes as a surprise, as the judge who oversaw the case last year concluded that NBA Top Shot Moments NFTs met the requirements to be considered a security.
Co-founder and CEO of Dapper Labs Roham Gharegozlou, co-defendant in the action, expressed satisfaction with the agreement. “We are pleased with the results of today’s settlement, which marks a significant step forward for Dapper Labs and the Flow community,” he said.
Why does this matter: This court settlement was a silver lining amid growing scrutiny and calls for stricter regulations for NFTs in the US
Last month, the US Treasury Department warned that NFTs are highly susceptible to fraud and scams and advocated for stricter enforcement of existing laws in the sector.
Legendary football player Cristiano Ronaldo also faces a $1 billion class action lawsuit for promoting its NFT brand on Binance. The lawsuit claims that Ronaldo significantly promoted investments in unregistered securities.
NBA Top Shot, released in 2020, is a collaboration between the NBA and Dapper Labs. NBA luminaries Michael Jordan, Kevin DurantIt is Klay Thompson are among the prominent investors. NFT collection sales volume increased by 12% in the last 24 hours, according to for CryptoSlam.
Photo courtesy: T. Schneider at Shutterstock.com
Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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