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Dapper Labs, the company behind the NBA Top Shot NFT platform, has settled a class action lawsuit in which customers claimed that NFTs sold through the platform were illegally offered as securities.
NBA Top Shot, launched in 2020, lets users buy and trade highlight moments from NBA in-real-life games as NFTs.
Court documents show that Dapper Labs will pay $4 million to the plaintiffs, which includes legal fees.
Roham Gharegozlou, CEO of Dapper Labs, posted on X (Twitter) on June 4 to reaffirm that the Flow blockchain, which powers NBA Top Shot, is a decentralized public network. He also stated that digital collectibles like NBA Top Shot “are not securities in the same way trading cards are not securities.”
The settlement will require Dapper Labs to make some changes to the platform. These changes include a commitment to further decentralize the Flow blockchain and fully transfer all $FLOW coins as part of the ecosystem development reserve to the Flow Foundation.
The company will also work with third-party platforms to ensure users can freely manage their assets.
If the settlement is approved, the plaintiffs will give up any future claims that Top Shot NFTs are securities.
“Dapper Labs will continue to engage at all levels to help ensure sensible approaches to this new technology — which ultimately is much better for both consumers and creators because of its openness, transparency, and auditability,” wrote Gharegozlou.
The post also mentioned that this resolution will allow the company to focus on launching new products and concentrate on “what matters.” Dapper Labs announced the release of its newest game, Fast Break, and highlighted Disney Pinnacle, an NFT platform launched in collaboration with Disney, which recently held its first in-app trading event.
