Dapper Labs Agrees to $4M Settlement in Class Action Securities Suit
Dapper Labs has reached a tentative settlement with investors who sued over alleged violations of federal securities laws regarding its NBA Top Shot Moments NFTs. The settlement, subject to court approval, includes a $4 million fund for class members, attorneys’ fees, and business changes. Dapper Labs will implement employee training on compliance with securities laws, increase payment and withdrawal speeds, and relinquish control of remaining FLOW tokens to the Flow Foundation for decentralization. CEO Gharegozlou sees the agreement as a step towards legal clarity on NFT classification. He aims to advocate for legislation clarifying that consumer NFTs are not subject to federal financial regulation. The company is not aware of any regulator claiming that Moments NFTs are securities, and a reported SEC investigation was closed in September 2023.
