Ruling that the popular NFT “NBA Top Shot” may be a security | coindesk JAPAN

On February 22, a court ruled that an NFT dubbed “Moment” from “NBA Top Shot” offered by Dapper Labs could be a security.

DapperLab’s blockchain native crypto asset flow (FLOW) isn’t necessarily a security, but “is integral to the overall scheme in question.”

“Basketball cards are not securities. Pokemon cards are not securities. Baseball cards are not securities. Lawyers argued, but a judge dismissed DapperLab’s case in a judgment on Thursday.

The court stated that “the fate of the buyer was tied to DapperLab’s success” as it controls the online marketplace for selling and trading Flow blockchain and NFTs.

Furthermore, the existence of a secondary market (secondary market) managed by Dapper Labs supports the ruling.

“Dapper Labs creating and maintaining a private blockchain is central to the court’s conclusion, privatizing the blockchain on which the value of NFTs depends and restricting NFT transactions to the Flow blockchain only. As such, purchasers will be dependent on DapperLab’s expertise and management efforts, as well as its continued success and existence.”

The court also said that “the determination that what DapperLab provided constitutes an investment contract is limited” and that not all NFTs constitute securities.

“Rather, the particular scheme offered by DapperLab creates a sufficient legal relationship between the investor and the promoter to establish an investment contract, and therefore a security,” the court said.

｜Translation: coindesk JAPAN
｜Editing: Takayuki Masuda
｜Image: Shutterstock
｜Original: NBA-Branded ‘Top Shot Moments’ NFTs May Be Securities, Judge Rules in Dapper Labs Case