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Dapper Labs posted a series of tweets in response to the judge’s ruling on the NBA-branded “Top Shot Moments.” The web3 company first posted that in the Friel v. Dapper Labs case, the court made an order characterized as a “close call.” The ruling simply rejected a motion to dismiss the complaint made during the case’s pleading stage.
Today’s order in the Friel v. Dapper Labs matter – which the Court described as a “close call” – only denied our motion to dismiss the complaint at the case's pleading stage. The judge did not conclude the plaintiffs were right, and it's not a final ruling on the case's merits.
— Dapper Labs (@dapperlabs) February 22, 2023
The team also noted that the judge did not affirm the plaintiffs’ position, nor was it a conclusive decision on the case’s substance. As per Dapper Labs, there have been consistent court decisions stating that consumer goods, such as art and collectibles like basketball cards, do not qualify as “securities,” according to federal law.
The confidence remains that the same principle applies to digital or other types of collectibles, including Moments. According to the arguments presented to the court, Moments are digital versions of trading cards and not financial instruments.
Unlike securities, Moments are unique in nature, non-fungible, and don’t contain rights to any underlying financial asset.
Dapper Labs added that NBA Top Shots is an NFT collection, unique in nature, without any financial security associated with it.
The Dapper Labs also said that the team is eagerly anticipating the opportunity to strongly defend their stance in court as the case proceeds. Their Twitter account shared that they prioritize compliance and consumer protection in their operations.
Moreover, they are aiming to cultivate secure and safe digital ecosystems that comply with all relevant laws and regulations in each jurisdiction where they operate.
Meanwhile, users on Twitter are sharing their opinions on the ruling by reiterating what the Howey Test actually entails. Multi-chain incubator and launchpad, Impossible Finance’s legal researcher tweeted that Howey Test marks “how the NFTs marketed & sold matters, not just its product features.”