NBA Top Shot NFTs on the Flow Blockchain managed by Dapper Labs have been ruled as securities.
a federal court, cryptocurrency company Dapper Labs’ request to dismiss a class action complaint alleging NBA Top Shot Moment NFTs are securities.
After the development, there was a sudden decrease in the price of Flow (FLOW) altcoin.
The company that developed the marketplace for the NBA’s Top Shots NFTs will have to face a lawsuit accusing those NFTs of selling unregistered securities after a judge dismisses the application.
The lawsuit, filed in 2021, alleges Dapper Labs violated US securities law by offering Top Shot Moments (digital video clips of highlights from NBA games) without registering them to regulators and using its control over the collections to prevent investors from withdrawing their funds.
On Wednesday, U.S. District Judge Victor Marrero denied Dapper Labs’ request to drop the case before trial, finding that Moments is a security under a legal standard known as the Howey test.
“The Court has found that the plaintiffs’ claims make each matter under Howey superficially probable and invalidates the defendants’ request to dismiss the alleged violation of Sections 5 and 12 of the Securities Act,” the ruling said.
*Not investment advice.
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