{"id":21378,"date":"2023-02-22T19:22:19","date_gmt":"2023-02-23T03:22:19","guid":{"rendered":"https:\/\/coinnetworknews.com\/federal-judge-rules-nba-top-shot-nfts-may-be-considered-unregistered-securities-bitcoin-news\/"},"modified":"2023-02-22T19:22:19","modified_gmt":"2023-02-23T03:22:19","slug":"federal-judge-rules-nba-top-shot-nfts-may-be-considered-unregistered-securities-bitcoin-news","status":"publish","type":"post","link":"https:\/\/coinnetworknews.com\/federal-judge-rules-nba-top-shot-nfts-may-be-considered-unregistered-securities-bitcoin-news\/","title":{"rendered":"Federal Judge Rules NBA Top Shot NFTs May Be Considered Unregistered Securities \u2013 Bitcoin News"},"content":{"rendered":"
\n
\n<\/header>\n
\n\"Federal\n<\/div>\n

A federal judge, Victor Marrero, ruled on Wednesday that the NBA Top Shot non-fungible tokens (NFTs) issued by Dapper Labs may meet the requirements to be considered an unregistered security. The case arose in 2021 when an NBA Top Shot collector sued Dapper Labs, claiming that the NBA Top Shot NFTs, known as \u201cMoments\u201d issued via the Flow blockchain, are securities.<\/strong><\/p>\n

Judge\u2019s Ruling Allows Friel v. Dapper Labs Case to Continue<\/h2>\n

United States District Court judge Victor Marrero agreed with the plaintiffs who filed a lawsuit against Dapper Labs on Feb. 22, 2023, noting that NBA Top Shot NFTs could plausibly be unregistered securities in the eyes of the law. On May 13, 2021, Jeeun Friel sued Dapper Labs for selling Top Shot NFTs without registering with the U.S. Securities and Exchange Commission (SEC). Dapper Labs attempted to get the court to dismiss the case, but Marrero denied the company\u2019s motion.<\/p>\n

Marrero\u2019s ruling simply allows the case to continue based on the judge\u2019s opinion that NBA Top Shot NFTs may be considered a security. Marrero said the ruling does not apply to the sale and distribution of FLOW, the Flow blockchain\u2019s native crypto asset. However, the Howey Test was applied to the NBA Top Shot \u201cMoments\u201d NFTs, and the Howey analysis is what supports the judge\u2019s decision.<\/p>\n

\u201cAlthough the literal word \u2018profit\u2019 is not included in any of the tweets, the \u2018rocket ship\u2019 emoji, \u2018stock chart\u2019 emoji, and \u2018money bags\u2019 emoji objectively mean one thing: a financial return on investment,\u201d Marrero said in the court filing. \u201cThe court is persuaded that Dapper Labs\u2019s scheme to sell Moments plausibly reflects horizontal commonality by being \u2018intertwined with interest in Dapper Labs,\u2019 its burgeoning new blockchain, and the token that \u2018powers it all.\u2019\u201d<\/p>\n

Dapper Labs Responds to Judge Marrero\u2019s Ruling on NBA Top Shot NFTs<\/h2>\n

On Wednesday, Dapper Labs commented<\/a> on the lawsuit and the judge\u2019s recent decision. \u201cToday\u2019s order in the Friel v. Dapper Labs matter \u2013 which the Court described as a \u2018close call\u2019 \u2013 only denied our motion to dismiss the complaint at the case\u2019s pleading stage,\u201d the company said on Twitter.<\/p>\n

\u201cThe judge did not conclude the plaintiffs were right, and it\u2019s not a final ruling on the case\u2019s merits. Courts have repeatedly held that consumer goods \u2013 including art and collectibles like basketball cards \u2013 are not \u201csecurities\u201d under federal law. We\u2019re confident the same holds true for Moments and other collectibles, digital or otherwise,\u201d Dapper Labs added.<\/p>\n

\n
\nTags in this story
\n<\/h6>\n
Art<\/a>, basketball cards<\/a>, collectibles<\/a>, consumer goods<\/a>, Dapper Labs<\/a>, Dapper Labs\u2019s scheme<\/a>, Digital<\/a>, dismissal<\/a>, federal judge<\/a>, final ruling<\/a>, financial return<\/a>, Flow blockchain<\/a>, Friel v. Dapper Labs<\/a>, horizontal commonality<\/a>, Howey Test<\/a>, investment<\/a>, Jeeun Friel<\/a>, Lawsuit<\/a>, Merits<\/a>, Moments<\/a>, NBA Top Shot<\/a>, NBA Top Shot collector<\/a>, NFT Market<\/a>, NFTs<\/a>, Non-fungible tokens<\/a>, pleading stage<\/a>, SEC<\/a>, Securities<\/a>, U.S.Securities and Exchange Commission<\/a>, unregistered security<\/a>, Victor Marrero<\/a><\/div>\n<\/div>\n

What do you think the implications of this ruling could be for the NFT market as a whole? Let us know what you think about this subject in the comments section below.<\/strong><\/em><\/p>\n

\n
\n\n<\/div>\n
\n
\nJamie Redman <\/h6>\n

\nJamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

\n
\n
\n<\/a>
\n<\/span>\n<\/p>\n<\/div>\n<\/div>\n

Image Credits<\/b>: Shutterstock, Pixabay, Wiki Commons<\/em><\/p>\n

\n

Disclaimer<\/strong>: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com<\/a> does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.<\/p>\n<\/div>\n

\n