A US judge rules that NBA Top Shot Moments on the Flow blockchain might be securities and refuses to dismiss a lawsuit against Dapper Labs for offering the NFTs
CoinDesk
Context & Ripple Effects
The refusal to dismiss put Dapper Labs' NBA Top Shot offering into a live securities-law fight rather than resolving the classification question at the pleading stage. That exposure ultimately ended in Dapper's $4M class-action settlement, giving the earlier ruling a concrete business consequence.
The case sits within a fragmented judicial record for crypto businesses: Coinbase's enforcement suit was allowed to proceed in part, while the Uniswap case was dismissed. Those outcomes make the legal treatment of a product's specific design and conduct more consequential than a broad label for blockchain services.
First-order effects
Dapper Labs had to continue defending allegations that its NBA Top Shot Moments were unregistered securities, rather than ending the case through dismissal.
NBA Top Shot purchasers retained a path to pursue their claims against Dapper Labs; the dispute was later resolved through the $4M settlement.
Second-order effects
Dapper's legal costs and settlement exposure raised the stakes for how it structured and marketed NBA Top Shot Moments.
Crypto-platform operators faced a less uniform litigation environment: the Coinbase case proceeding in part and Uniswap's dismissal pointed to product-specific court outcomes.
Third-order effects
If courts continue handling blockchain products claim by claim, legal risk will increasingly turn on an offering's mechanics and marketing rather than on whether it is described simply as an NFT or a crypto service.
The trend: Crypto regulation is being shaped through uneven, product-specific court rulings that force platform operators to price in litigation risk before a uniform legal framework emerges.
U.S. judge ruled today that NBA Top Shot NFTs are “plausibly” securities, denying Dapper Labs' move to dismiss case. However, also says court's “narrow” conclusion wouldn't apply to all NFTs. Case continues. Story w/ Dapper comment, at @decryptmedia: https://decrypt.co/...
“Not all NFTs offered or sold by any company will constitute a security, and each scheme must be assessed on a case-by-case basis,” Marrero wrote. Interesting. https://www.theblock.co/...
oof “the judge describes the Flow blockchain [...] as a “private” network as opposed to a public one like the Bitcoin blockchain.” https://decrypt.co/...
Yes, a judge analyzed Howey, but this order is neither substantive nor final. All this means is that the case will go forward, likely reaching summary judgment. At that point, the judge can make a final determination on the merits. https://www.coindesk.com/... https://twitter.com…
NFTs and tokens being considered securities by the SEC and courts is the most obvious outcome to anyone who pays attention. The questionable regulatory issue will likely be treating stablecoins as securities given no expectations of profit. https://www.coindesk.com/...
Surviving a motion to dismiss means that it's plausible the plaintiff could provide evidence to support the allegations in court, which isn't a surprising outcome here given precedent cases. This doesn't tell us much about the strength of the claims yet https://www.coindesk.com/.…