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Was trading NBA Top Shots actually like trading stocks? A lawsuit will decide
February 22, 2023
NBA Top Shot developer Dapper Labs and its CEO, Roham Gharegozlou, will face a lawsuit accusing the company of selling unregistered securities in the form of its “Moments,” which are non-fungible tokens for sports fans.
Despite Dappers’ lawyer’s claims that “Basketball cards are not securities. Pokémon cards are not securities. Baseball cards are not securities. Common sense says so. The law says so. And, courts say so,” Judge Victor Marrero decided to let the case go forward.
As he wrote in his decision (Friel v. Dapper Labs, Inc. et al., 1:21-cv-05837-VM):
In totality, the economic realities of this case support the Court’s conclusion that the AC’s allegations pass muster at this stage. In sum, Plaintiffs adequately allege that Dapper…