According to TechFlow, NBA Top Shot developer Dapper Labs has reached a settlement in a class action lawsuit that accused the company of violating securities laws by improperly selling digital collectibles. According to a court document provided by Dapper Labs, the company agreed to settle the lawsuit for $4 million. The document also stated that the money will be allocated to a settlement fund and provided to eligible claimants.
"The settlement of Friel v. Dapper Labs further reinforces Dapper Labs' view that NBA Top Shot Moments are not securities under federal law," Dapper Labs said in a statement. The plaintiffs in the lawsuit claimed that Dapper Labs made hundreds of millions of dollars in profits by selling unregistered securities while artificially "propping up" its NFT market.