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ARTICLE · 03 MARCH 2023

Judge Dismisses Dapper Labs Motion, Allows NFT Class Action To Proceed

Winston Taylor
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On February 22, 2023, the Southern District of New York denied a motion to dismiss (the Motion) by blockchain company Dapper Labs and its CEO Roham Gharegozlou.

United StatesTechnology
Wooseok Ki
Wooseok Ki
George E. Mastoris
George E. Mastoris

On February 22, 2023, the Southern District of New York denied a motion to dismiss (the Motion) by blockchain company Dapper Labs and its CEO Roham Gharegozlou. Dapper Labs is behind the "NBA Top Shot Moments" (Moments) Non-Fungible Token (NFT) collection and also controls the private Flow blockchain network, on which the NFT transactions occur via the exclusive FLOW tokens.1

In a May 2021 class action suit by investors who had purchased Moments NFTs, plaintiffs alleged that Dapper Labs had violated federal securities laws in neglecting to register Moments with the U.S. Securities and Exchange Commission. Dapper Labs responded by filing a motion to dismiss on the grounds that Moments – which capture NBA highlights – are not securities but rather tradable goods along the lines of digital basketball cards.

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