NBA Top Shot NFTs may Qualify as Securities, Judge Says

SEC has started to churn out unregistered securities lawsuits left and right in the cryptocurrency market. Some experts may argue that several regulatory issues plague the DeFi markets, but the focus of SEC officials to dub everything as unregistered securities seems biased and antithetical to the interests of crypto investors.

The latest project to get the burn from SEC is the Top Shots Moments NFT collection issued by NBA. This NFT collection was released in partnership with Dapper Labs.

The firm has faced a class action lawsuit filed against it 1.5 years ago that alleges the NFT violated federal securities law. The lawsuit has been directed against the CEO of DapperLabs named, Roham Ghregozlu.


Bitcoin Revolution is a crypto trading tool for investing in the crypto market with an %88 average win rate on trades and is the #1 trading software for crypto traders from all around the globe in 2022. Try it For FREE Today. 


Federal Judge has Rejected the Motion to Dismiss the Case Against DapperLabs

District Judge Victor Marrero has dismissed the motion filed by the defendants in the lawsuit to dismiss the case. Marrero maintains that the consideration accused by the plaintiff in lieu of the Howey Test is deemed plausible by the court. Howey Test has been a recognized acid test qualified by SCOTUS to ascertain whether a cryptocurrency is a security or not.

The ruling has also covered the native token issued by DapperLabs called Flow tokens. According to the legal decree, the token is not to be categorized as securities, but they are to be prosecuted as playing an important role in facilitating the sales of alleged NFT collection.

The court highlighted the claims of the plaintiffs that without Flow tokens, no transactions are possible on the DapperLabs platform.

According to the statement issued by Judge Marrero, Dapper Labs has existed as a private blockchain which means that its investors rely on the performance and expertise of the management to profit from their NFT purchases.

The ruling also noted that DapperLabs issued products as an investment contract and the NFTs issued by the firm might qualify as securities.

However, the ruling has dubbed the investment model that connects the cryptocurrency firm with its investors as dubious. Therefore, the judge has ruled that NFTs issued by the firm qualify as unregistered securities.

The court has granted the motion in favor of the SEC to classify NBA NFTs as unregistered securities and need to be registered with SEC. DapperLabs has three weeks to submit a response or appeal.


start trading

Best Forex World is not responsible for the content, accuracy, quality, advertising, products or any other content posted on the site. Some of the content on this site (not all) is paid content that is not written by our authors and the views expressed do not reflect the views of this website. Any disputes you may have with brands or companies mentioned in our content will need to be taken care of directly with the specific brands and companies. The responsibility of our readers who may click links in our content and ultimately sign up for that product or service is their own. Cryptocurrencies, NFTs and Crypto Tokens are all a high-risk asset, investing in them can lead to losses. Readers should do their own research before taking any action.


Previous post Cardano Founder Charles Hoskins Claims that US Regulators are Working to Sabotage DeFi
Next post Germany’s Second Largest Bank DZ to Offer Crypto Custodial Services to Commercial Clients