June 4, 2024 2:15 a.m. | 2 minutes of reading
In a significant development, Dapper laboratoriesthe creator of NBA Top Shot Moments NFT collection, agreed to a $4 million settlement in a class-action lawsuit.
What happened: Settlement funds will be available to eligible claimants, according to court documents provided by Dapper Labs, The block reported.
The lawsuit, originally filed in the U.S. District Court for the Southern District of New York in 2021, accused Dapper Labs of making significant profits by selling unregistered securities and artificially propping up the market for its NFTs.
“The settlement in Friel v. Dapper Labs further affirms Dapper Labs’ belief that NBA Top Shot Moments are not securities under federal law,” the company said. This statement comes as a surprise, as the judge in the case last year concluded that NBA Top Shot Moments NFTs met the requirements to be considered a title.
Co-founder and CEO of Dapper Labs Roham Gharegozlou, a co-defendant in the lawsuit, said he was satisfied with the settlement. “We are pleased with the results of today’s settlement, which marks a significant step forward for Dapper Labs and the Flow community,” he said.
Why is this important: This lawsuit settlement was a glimmer of hope amid growing scrutiny and calls for stricter regulation of NFTs in the United States
Last month, the US Treasury Department warned that NFTs are highly susceptible to fraud and scams and advocated for stricter enforcement of existing laws in the sector.
Legendary footballer Cristiano Ronaldo also faces a billion-dollar class-action lawsuit for the promotion of its NFT brand on Binance. The lawsuit says Ronaldo significantly encouraged investments in unregistered securities.
NBA Top Shot, released in 2020, is a collaboration between the NBA and Dapper Labs. NBA luminaries Michael Jordan, Kevin DurantAnd Klay Thompson are among the largest investors. The sales volume of the NFT collection increased by 12% in the last 24 hours, according to at CryptoSlam.
Photo courtesy: T. Schneider on Shutterstock.com
Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga Publishers.
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