Dapper Labs: Treating digital basketball cards as securities is absurd

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Dapper Labs has asked a Manhattan federal court to dismiss a lawsuit by investors calling NBA Top Shot Moments collectible tokens securities.

NBA Top Shot Moments featuresBlockchain-based digital cards featuring basketball players with their best game moments. The collection was developed in collaboration with the National Basketball Association (NBA), which sees non-fungible tokens (NFTs) as another way to engage with sports fans. 

In May 2021, many NBA Top Shot ownersMoments sued Dapper Labs and its CEO Roham Gharegozlou, alleging the sale of unregistered securities that violates US law. Some claims have been dismissed by the court, others are still pending.

As Dapper Labs stated in its petition fortermination of the case, NFTs are individual collectibles that do not have the characteristics of securities and do not give the right to control the share of any enterprise. According to the developers, calling basketball or baseball cards securities and filing lawsuits because of this is contrary to common sense.

According to the Blockchain Gaming Alliance (BGA), forIn the third quarter of 2021, revenue from games using NFTs amounted to $2.32 billion. Given the rapid development of the industry, sports organizations have become increasingly interested in collectible tokens. Last year, American football player Tom Brady also announced plans to launch the Autograph platform for issuing and selling NFTs.

To prevent money laundering throughcollectible tokens, last year Dapper Labs announced a partnership with analytics firm Chainalysis to track suspicious NFT transactions.