Víctor Marreo, the judge in charge of Dapper Lab NBA top shot class action lawsuit, has said its NFTs could be securities. The ruling came Wednesday as the judge rejected a motion by Roham Gharegozlou, the chief executive of Dapper Labs, to dismiss the lawsuit on the grounds that the NFTs were not securities.
By denying the motion, the judge allowed the case to proceed and Dapper Labs now has 21 days to respond to the court’s decision. In making the decision, the judge reviewed the Howey Test, a method used by the SEC to determine whether a transaction qualifies as a “investment contract” Or not. If the NFTs qualified as investment contracts, then they can be classified as securities.
The judicial presentations indicate that; “Ultimately, the Tribunal’s conclusion that what was offered by Dapper Labs was an investment contract under Howey is limited. Not all NFTs offered or sold by any company will constitute securities, and each scheme must be evaluated on a case-by-case basis.”
However, “the particular scheme by which Dapper Labs offers Moments that creates the sufficient legal relationship between the investors and the promoter to establish an investment contract, and this is a security, according to Howey”, influenced the judge’s decision.
Ruling Does Not Declare NBA Top Shot NFTs As Securities
Despite the ruling, it does not mean that NBA Top Shot NFTs are securities. At least that’s the opinion of Jake Chervinsky, a US prosecutor. In a tweet, he points out that the judge did not declare that NFTs were securities or not:
This is false
The judge decided nothing. He allowed the case to proceed beyond a motion to dismiss because the securities claims were at least “plausible,” an extremely low bar, and not a final decision at all.
Do I really have to say “basketball cards are not values”? https://t.co/W1yYVcW1Ki
—Jake Chervinsky (@jchervinsky) February 22, 2023
Continue adding, “This dispute aside, it would be absurd if all valuable digital assets stored in centralized databases were securities.”
This class action lawsuit against Dapper Labs was filed in May 2021 by plaintiff Jeeun Friel, who accused the company of selling NFTs as unregistered securities.
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*All investment/financial opinions expressed by NFT Plazas come from the personal research and experience of our site moderators and are intended for educational purposes only. People are required to fully research any product before making any type of investment.
Basil is an avid fan of blockchain technology and all its innovations, and he is passionate about sharing this narrative with his audience. He has spent over five years in the crypto space, specializing in research and creating Web3 content for various media outlets around the world.
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