Dapper Labs, the company behind the NBA's Top Shot and other popular on-chain hits, has settled for a years-long class action. charge Top Shot has settled with clients who argued that NFTs constitute illegally offered securities, court filings revealed Monday.
As part of the settlement, Dapper will pay $4 million to the plaintiffs in the lawsuit, said Roham Garegozlu, the company's CEO. Decrypt. Those funds include monetary relief for plaintiffs' claims, and also cover legal fees.
In return, if the settlement is approved, the plaintiffs will lose any future rights in Gharegozlou to claim that the Top Shot NFTs are securities.
“The settlement provides legal clarity and allows the Dapper Labs team to focus on its core mission – delivering unparalleled experiences to its end users,” the executive said.
Last February, a federal judge Purchased– In a big setback for Dapper – Top Shot NFTs meet the definition of a “substantially” security offering, so the lawsuit could go ahead.
Key to the judge's finding was the existence of Top Shot NFTs. FlowBlockchain network originally developed by Dapper. The judge considered Flow a “private” blockchain, comparing it to networks like Bitcoin or Ethereum, which are not controlled by any entity.
The judge also found that the statements made by Dapper and his representatives, including Garegozlow, showed that the collectibles would increase in value over time.
The company has insisted in the past — and Gargozlow maintains today — that Flow is not sufficiently decentralized and controlled by Dapper, whose network is maintained by the independent Flow Foundation.
The Dapper co-founder added, however, that plaintiffs in the class-action suit have asked for “certain business changes” at the company as a condition of the settlement. Those demands accepted by Dapper include relinquishing any FLOW tokens the company has allocated to the Ecological Reserve Flow Foundation.
Other demands, such as allowing third-party marketplaces in addition to Dapper to promote high-shot NFTs, and the company's exit process in a more timely manner, were settled years ago.
When the case is first filed In 2021It marked one of the first tests of the security status of NFTs – the heyday of digital asset growth. Since then, the crypto fungible token market has had huge areas Enter the fire by American regulators.
Except in rare cases Special factsNFTs – at least for now – seem to have largely rejected such a property.
Edited by Andrew Hayward. This article has been updated to clarify the plaintiffs' request.
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