Dapper Labs Settles $4M Lawsuit, Confirms NBA Top Shot NFTs are not Securities
Summary:
Dapper Labs and its CEO, Roham Gharegozlou, have settled a class-action lawsuit, agreeing to pay $4 million and confirming that NBA Top Shot Nonfungible Tokens (NFTs) are not securities. The lawsuit filed by a group of investors alleged that Dapper sold unregistered securities. To ensure the decentralization of Flow blockchain, Dapper will make alterations to its business and transfer ownership of remaining Flow tokens to the Flow Foundation. The firm will also introduce an annual staff training program focused on federal securities laws.
A $4 million settlement agreement has been finalised, concluding a class-action lawsuit against Dapper Labs and confirming that NBA Top Shot nonfungible tokens (NFTs) are not securities, as per the statement of the CEO, Roham Gharegozlou. Gharegozlou, in a post published on June 4, revealed the agreement, settled with a collective of investors alleging that the firm had dealt in unregistered securities. He stated that the group's legal investigation concluded that the NBA Top Shot Moments NFTs, created by Dapper, were part of "a decentralized public network", indicating these tokens "are not securities, similar to how trading cards are not".
New York District Court records dated June 3 indicate that Dapper Labs has agreed to pay the $4 million settlement sum, in return for the plaintiffs, led by Jeeun Friel, discontinuing assertions that the NFTs were securities. Dapper is also committing to business modifications to ensure the decentralisation of the Flow blockchain, such as transferring ownership of any remaining Flow (FLOW) tokens to the Flow Foundation.
Further commitments include the establishment of a compulsory annual staff training program focussed on federal securities laws. District Judge Victor Marrero still needs to ratify the agreement. According to Gharegozlou, Dapper Labs will keep ongoing dialogue with policy and regulatory bodies to ensure the right approach to handling this emerging technology. "The future of our industry and open digital systems depends on effective communication with policymakers and regulators," Gharegozlou wrote.
Published At
6/4/2024 8:05:52 AM
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