• Loading stock data...
Sunday, May 19, 2024

NBA Top Shot Maker Faces Lawsuit for Unregistered Securities

  • Dapper Labs and its CEO Roham Gharegozlou are facing a lawsuit that alleges its video-based digital collectibles are unregistered securities.
  • A motion to dismiss the 2021 lawsuit was denied by United States District Court Judge Victor Marrero on Wednesday.
A NBA Top Shot collectible NFT of Lebron James is displayed on a phone.
NBA Top Shot

Dapper Labs, the owner of NBA-branded NFTs, and its CEO Roham Gharegozlou are facing a lawsuit that alleges its video-based digital collectibles NBA Top Shot Moments are unregistered securities, not fan products.

A motion to dismiss the 2021 lawsuit was denied by U.S. District Court Judge Victor Marrero on Wednesday.

“Plaintiffs adequately allege that Dapper Labs’ offer of the NFT, Moments, was an offer of an ‘investment contract’ and therefore a ‘security,’ required to be registered by the SEC,” the judge wrote in his decision. 

“Courts have repeatedly found that consumer goods — including art and collectibles like basketball cards — are not securities under federal law,” Dapper Labs SVP Stephanie Martin told The Verge after the ruling. “We are confident the same holds true for moments and other collectibles.”

The plaintiffs also accuse Dapper Labs of “propping up the market for Moments as well as the overall valuation of NBA Top Shot” and the value of its Flow token by preventing money withdrawals by users.

While the tokens aren’t securities, they were ruled “necessary to the totality of the scheme at issue.”

Marrero added: “Not all NFTs offered or sold by any company will constitute a security, and each scheme must be assessed on a case-by-case basis.”

Dapper Labs has three weeks to respond to the lawsuit.

Copy Link
Link Copied
Link Copied

What to Read

Chaos at the PGA Championship: Here’s What We Know

The No. 1 golfer in the world nearly didn’t make it to Valhalla Golf Club.

Mets Owner Faces Backlash After Tweet Sparks Trade Speculation

Mets owner Steve Cohen is walking back a now deleted tweet that further riled an impatient fan base.

NFL’s Christmas Shake-Up: Netflix and Amazon Will Take It Over in ’25

This is the new-age NFL, where anything goes, if the price is right.

Is There a Sneakerhead Culture for Soccer Jerseys? PE Firm Thinks So

The Chernin Group invests $38.5 million in a U.K.-based seller of vintage jerseys.
podcast thumbnail mobile
Front Office Sports Today

MLB, NBA, NHL Broadcasting Future Goes to Court


Featured Today

Michael Block signs autographs on the 18th hole during day three of practice for the PGA Championship at Valhalla Golf Club on Wednesday, May 15, 2024.

‘I Prefer It This Way’: How Life Works for PGA Club Pros

Here’s how life works for the qualifiers at golf’s second major.
February 5, 2019; Washington, DC, USA; The grounds of the Capitol Building empty out following the conclusion of President Donald Trump's State of the Union speech on February 5, 2019.
May 18, 2024

‘A Breathtaking Lobbying Campaign’: The NCAA’s Sophisticated Effort to Save Amateurism

Inside the carefully coordinated, multimillion-dollar operation to end the athletes’ rights era.
May 14, 2024

The WNBA Was Forged in Houston. Why Won’t It Go Back There?

Houston’s a perfect fit for expansion. The league isn’t considering it yet.
May 9, 2024; Indianapolis, IN, USA; Indiana Fever guard Caitlin Clark (22) stands with the team during the national anthem on Thursday, May 9, 2024, during the preseason game against the Atlanta Dream at Gainbridge Fieldhouse in Indianapolis.
May 12, 2024

‘Perfect Storm’: The Rise of Local WNBA Broadcast Pacts

With national attention reaching new heights, regional coverage could dictate the future.


Powered By

Careers in Sports

Looking for a new job? Check out these featured listings and search for openings all over the world.
Live Nation
Multiple - USA Careers
Multiple - USA Careers
Multiple - USA Careers

Rapid Returns: How Technology Is Getting You Back to Your Seat

How Oracle’s POS technology is helping fans get back to their seats faster.
February 16, 2024

Wilson Introduced an Airless Basketball for $2,500. We Had Questions

The black, 3D-printed ball appeared in last year’s Slam Dunk Contest.
February 21, 2024

Apple Looks for Broad Reach with Scoreboard App

Apple Sports launched on Wednesday, as the MLS season kicks off.

Major League Rugby’s Vision for American Rugby

How Major League Rugby is leading the Rugby renaissance in the U.S.

Live Sports Are Now High-Tech Experiences

Oracle is leading the technology revolution happening in stadiums across the world.

How Cisco and the NFL Are Shaping a More Inclusive Future

The NFL and Cisco partner to launch the NFL IT Apprenticeship Program.
The Los Angeles Chargers are leaning into their Hollywood home to promote Disney's upcoming movie.
September 12, 2023

AI Robots Take Seats At NFL Game

Disney used SoFi Stadium to promote its upcoming science fiction movie.

MLS’ Chris Schlosser on Pioneering the Digital-First Sports League with AI

Chris Schlosser discusses MLS’s growth and digital transformation.