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In an announcement made by Dapper Labs on Monday, the team behind the popular NBA Top Shot Moments NFT collection revealed that a class-action lawsuit accusing the company of improperly selling NFTs and violating securities laws has been resolved.
Was a Settlement Reached?
According to the court document released by Dapper Labs, the lawsuit was settled for $4 million. The document also stated that the money would be transferred to a settlement fund, which would be allocated for the use of the rightful claimants.
Dapper Labs made the following statement:
The settlement in the Friel vs. Dapper Labs case further reinforces Dapper Labs’ belief that NBA Top Shot Moments are not securities under federal law.
This settlement, seen as a success for Dapper Labs, represents a turning point in the process, especially considering that last year the judge handling the case found that NBA Top Shot Moments NFTs met the criteria to be classified as securities and did not dismiss the Friel vs. Dapper Labs case.
The plaintiffs had claimed that Dapper Labs created an artificial “market support image” for its NFTs and made hundreds of millions of dollars by selling unregistered securities.
Considering that the NBA Top Shot collection has achieved a volume of approximately $1.246 billion since its inception, it can be said that the plaintiffs were not entirely wrong about the profits. The mentioned lawsuit emerged in 2021 in the U.S. District Court for the Southern District of New York.
CEO and Lawsuit Process
Additionally, Dapper Labs’ co-founder and CEO Roham Gharegozlou was also seen as a defendant in the lawsuit individually, and the settlement proved his stance. Gharegozlou made the following statement:
We are pleased with the outcome of today’s settlement, which is an important step for Dapper Labs and the Flow community.
It is known that NBA Top Shot NFTs were created on the Flow blockchain, developed by Dapper Labs.
Dapper Labs stated that since March 2022, four additional marketplaces have been created with the “authority to display and sell NBA Top Shot Moments NFTs.”
Dapper Labs also made the following statement:
This expansion offers collectors more flexibility and opportunities to trade and enjoy their Moments, fully supported by the NBA and the NBA Players Association.
