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A federal judge has ruled that non-fungible tokens (NFTs) of NBA Top Shot Moments could be considered securities under United States securities laws. The ruling came as the judge denied a motion from Dapper Labs CEO Roham Gharegozlou to dismiss a class-action lawsuit claiming that its NBA Top Shot NFTs are securities.
What Does it Have to do with Ripple?
While some cryptocurrency enthusiasts feared that this ruling could impact the outcome of the ongoing Ripple v. SEC lawsuit, an American lawyer, MetaLawMan, has clarified that this ruling will not affect the Ripple lawsuit.
According to MetaLawMan, the Top Shot decision was a ruling on a motion to dismiss the complaint and assumed all allegations in the complaint were true, whereas the Ripple case is at the summary judgment stage, where the judge looks at the evidence submitted by the parties.
The Top Shot decision does not address secondary market sales of the Top Shot NFTs, and the Judge emphasized in his opinion that not all NFTs offered or sold by any company would constitute a security. The Judge cited the fact that Top Shots traded on a private blockchain run by the issuer as a key factor in his ruling. Ripple, on the other hand, trades on a public blockchain.
The judge’s decision indicates that not all NFTs are securities, and each scheme must be assessed on a case-by-case basis. Ultimately, the judge’s conclusion that what Dapper Labs offered was an investment contract under the Howey test is narrow. For these reasons, MetaLawMan believes that the Top Shot opinion could be considered a net positive for Ripple.
The latest on the Ripple-SEC case is that the unsealing of the contentious Hinman speech records is now again at the center of it all. Most recently, on February 22, journalist Roslyn Layton filed an updated request to intervene to ask the court for access to the Hinman speech, as reported in a tweet by pro-XRP lawyer James Filan.
When Layton submitted her request for disclosure of the speech materials, she claimed that the SEC had mistakenly supplied the materials in support of its own summary judgment petition.
While it is still unclear what the outcome of the Ripple lawsuit will be, this ruling should not have any impact on the case. This news highlights the importance of understanding the nuances of legal cases and not making assumptions based on unrelated legal rulings.