Dapper Labs Settles a $4M NFT Lawsuit Regarding NBA Top Shot Moments

Dapper Labs, the creator behind the once-popular NBA Top Shot Moments NFT collection, announced on Monday 3rd June that it had settled a class-action lawsuit accusing the company of violating securities laws through the unlawful sale of digital collectibles.

According to court documents, Dapper Labs agreed to a $4 million settlement, which will be allocated to a settlement fund for eligible claimants.

In a statement, Dapper Labs emphasized that the settlement in the 'Friel vs. Dapper Labs case' reinforces their belief that NBA Top Shot Moments are not securities under federal law.

This settlement is notable because last year, the judge overseeing the case ruled that NBA Top Shot Moments NFTs met the criteria to be considered securities, allowing the lawsuit to proceed. The plaintiffs in the lawsuit alleged that Dapper Labs made hundreds of millions of dollars in profit by selling unregistered securities while artificially "propping up the market" for its NFTs. They also claimed that Dapper Labs prevented users from withdrawing their money for extended periods, in some reports.