The creator of the
In the suit, filed in 2021, purchasers of Top Shot Moments — digital video clips of highlights from NBA games — allege that
US District Judge
“Hypothetically, if Upper Deck or Topps, two longtime producers of physical sports trading cards, were to go out of business, the value of the cards they sold would be wholly unaffected, and may even increase, much like posthumously discovered art,” the judge wrote.
He continued: “That is not true here, where plaintiffs allege that the pooling of capital generated from the sale of Moments propped up the Flow Blockchain and where the value of Moments is intertwined with the success of that blockchain and Dapper Labs.”
An Apparent First
The decision appears to be the first addressing whether NFTs are securities, Marrero said, cautioning that it doesn’t mean all of them are. The case is part of a wider legal and regulatory battle over whether digital assets, such as NFTs and crypto tokens, are securities and must be registered with the
Dapper said the case is far from over.
The judge “did not conclude the plaintiffs were right, and it is not a final ruling on the merits of the case,” spokesperson Stephanie Martin said in a statement. “Courts have repeatedly found that consumer goods – including art and collectibles like basketball cards – are not securities under federal law. We are confident the same holds true for Moments and other collectibles, digital or otherwise, and look forward to vigorously defending our position in court as the case continues.”
Top Shot was launched in 2020 and became an overnight success. The collection, created by Dapper with the NBA and the
Since its debut, Top Shot has been far surpassed by sales of other NFTs, such as those of the game Axie Infinity, a collection of digital people and creatures called CryptoPunks and the Bored Ape Yacht Club, but it’s still one of the most recognized names in NFTs.
The market itself has been battered. NFT sales plunged last year, before beginning to rebound in recent months. Price floors — the value of the cheapest token in each collection — for some of the most popular collections have been fairly stable over the past 24 hours. The floor for Bored Ape fell 7.7%, with CryptoPunks and Meebits up by 0.41% and 3.24% respectively, according to data from NFT Price Floor.
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