NBA Top Shot NFTs Are 'Plausibly' Securities, Judge Rules in Dapper Labs Lawsuit

Are NBA Top Shot NFT moments unregistered securities? That’s what a lawsuit filed against Top Shot creator Dapper Labs in 2021 alleges—and the judge apparently agrees.

United States District Court Judge Victor Marrero today denied Dapper’s request to dismiss the suit, writing that the NFTs offered on Dapper's platform indeed appear to satisfy the requirements of a security.

In his ruling, Marrero used the Howey Test—referring to a landmark U.S. Supreme Court case—and determined that the NBA Top Shot NFT collectibles platform plausibly meet the stipulations of a security. As a result, the case will continue and Dapper Labs must stand trial.

“Plaintiffs adequately allege that Dapper Labs’s offer of the NFT, Moments, was an offer of an ‘investment contract’ and therefore a ‘security,’ required to be registered with the SEC,” Marrero wrote.

Decrypt reached out to Dapper Labs for comment, but did not immediately hear back.

This story is developing and will be updated with additional information.