Dapper’s Attempt to Dismiss Lawsuit for Violating Securities Law Fails

02/25/2023 04:47 • Digital Disruptors • 81 views

It is reported that Dapper tried to dismiss the lawsuit filed against the company for violating the securities law when providing NBA Top Shot NFT Moments. Victor Marrero, a federal judge in Manhattan, rejected Dapper’s motion of rejection because he found that the argument of marking Top Shot NFT as a security was reasonable, which was the first time in this new technology.

Legal expert: The judge’s judgment is a very good decision in the lawsuit filed against Dapper’s accusation of violating the securities law

Analysis based on this information:

Dapper, the company behind NBA Top Shot NFT Moments, attempted to dismiss a lawsuit filed against them for violating the securities law. The lawsuit was filed on behalf of one of the collectors who bought a Top Shot NFT for $3,000 in February and claimed that the NFT should be classified as a security. The company argued that the NFT was not a security and therefore, the lawsuit should be dismissed. However, the federal judge in Manhattan, Victor Marrero, rejected Dapper’s motion of rejection because he found that the argument of marking Top Shot NFT as a security was reasonable, which was the first time in this new technology.

The ruling has significant implications for the entire NFT industry, as it opens the door for more lawsuits filed by disgruntled collectors who feel their investments were not properly classified or protected. The decision was based on the fact that the NFTs are marketed as investments and have a secondary market where the value of the NFT can fluctuate based on demand. Additionally, the plaintiff in the case argued that Dapper made false statements about the scarcity of the NFTs and their potential value, which further supports the classification of the NFT as a security.

This ruling marks a significant milestone in the ongoing debate over the classification of NFTs and their regulation. Some argue that NFTs are not securities and should not be subject to the same regulations. However, others argue that NFTs are being marketed as investments and therefore, should be held to the same standards as traditional securities. The ruling by Judge Marrero suggests that the court is taking a more cautious approach to this new form of asset and is open to the argument that NFTs are securities.

In conclusion, Dapper’s attempt to dismiss the lawsuit filed against them for violating the securities law has failed. The federal judge in Manhattan rejected Dapper’s argument that the Top Shot NFTs are not securities and found that the argument of marking Top Shot NFT as a security was reasonable. This decision has significant implications for the NFT industry and could lead to more lawsuits filed by disgruntled collectors who feel their investments were not properly classified or protected. The court’s cautious approach to this new technology suggests that more regulation and oversight may be necessary to protect investors in the future.

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