US Judge Rules Against NBA Top Shot; What Does It Mean For NFTs?
NBA Top Shot News: Recently, a federal judge in Manhattan gave the first hint on NFTs are going to be regulated by ruling against Dapper Labs. It is one of the top NFT companies and the company behind NBA Top Shot and CryptoKitties.
Dapper requested the dismissal of a lawsuit filed against the business on the grounds that it offered NBA Top Shot NFT Moments in violation of securities laws. In a first for this novel technology, Judge Victor Marrero rejected Dapper’s motion to dismiss. However, after concluding that arguments designating Top Shot NFTs as securities were “plausible.” Following the news, a number of NFT collectors praised the industry on Twitter. But such responses might be hasty according to legal experts.
Court ruling may help NFT Market
Jeremy Goldman, an attorney specializing in blockchain technology stated
I think this is actually a pretty good choice for the majority of people who mint NFTs using public blockchains. Also, who allows their NFTs to be traded on exchanges.
Due to the emphasis, Judge Marrero placed on Dapper Labs’ Flow blockchain being a “private” network, Goldman believes the court’s ruling may actually be favorable for the larger NFT market. The judge claimed that Dapper Labs’ creation of the Top Shot NFTs as well as the creation of the Flow blockchain, which the NFTs were launched upon, may qualify as securities.
NBA Top Shot NFT holders believe in Dapper Labs
According to the judge, Top Shot NFT holders must have an interest in Dapper Labs’ success. Under U.S. federal law, security must have a relationship of this kind between a passive good and the active labor of a different entity.
Things don’t seem promising for Dapper Labs, even if the effect of Wednesday’s decision on the larger NFT market is still up for debate. Roham Gharegozlou, the company’s founder and CEO, made reference to the decision on Wednesday. He responded in a letter to staffers in which he announced another 20% staff reduction at Dapper. Also, following a 22% reduction in November.
The question of whether the U.S. government views the majority of NFTs as securities have not yet been resolved. However, the recent posturing may have effectively answered it.
Also Read: Judge Rules NBA Top Shot NFTs As Securities; Flow’s Price On Freefall?
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