By
Darya Rudz
November 14th, 2023
The lawsuit named Dapper Labs alongside its co-founder and CEO Roham Gharegozlou, as defendants. However, the latest development may signal that the duo has been cleared of any wrongdoing.
Following a Monday announcement, it appears that Dapper Labs may have just settled the class action lawsuit against it. The once popular creator of NBA Top Shot Moments NFT collection had been embroiled in the case over allegations that it violated securities laws while carrying out its digital collectibles business.
As court documents show, Dapper Labs agreed to settle the lawsuit for $4 million. The agreement also noted that the said amount would be allocated to a settlement fund for qualified claimants to easily access it.
According to a company statement, the agreement to settle is a major win for Dapper Labs. The firm believes that it further drives home its point that NBA Top Shot Moments are not securities.
Recall that the Friel vs. Dapper Labs case took an interesting turn last year when the judge presiding over it declared that NBA Top Shot Moments NFTs met the requirements to be classified as a security. The plaintiffs told the court that Dapper Labs made hundreds of millions of dollars off the sales of unregistered securities.Part of the allegations also was the claim that, for several months, the firm did not allow users to withdraw their money.
Dapper Labs and CEO Cleared
The lawsuit named Dapper Labs alongside its co-founder and CEO Roham Gharegozlou, as defendants. However, the latest development may signal that the duo has been cleared of any wrongdoing. Gharegozlou wrote in a statement:
“We are pleased with the results of today’s settlement, which marks a significant step forward for Dapper Labs and the Flow community.”
NBA Top Shot NFTs are minted on the Flow blockchain, another creation of Dapper Labs.
The company has been keen on expansion and has been putting efforts in that regard. In a March 2022 statement, Dapper Labs announced adding four “additional” marketplaces to facilitate the sales of NBA Top Shot Moments. With the expansion, the firm sought to allow collectors more ease and flexibility in trading their Moments.
Notably, the hype around NFT collections has since dwindled and is no longer what it used to be. For instance, monthly trading volumes for NBA Top Shot NFTs peaked at $226 million in February 2021, according to CryptoSlam data. However, as is the case with most other top NFT collections, trading volumes have since reduced significantly for NBA Top Shots.
