According to internal documents obtained by Fortune magazine, NBA Top Shot developer Dapper Labs has been under investigation by the U.S. Securities and Exchange Commission (SEC) since September of last year.
SEC Investigation of Dapper Labs
A closing report signed by David Hirsch, head of the SEC’s Division of Enforcement’s Cryptocurrency and Cyber Unit, indicates that the investigation into Dapper Labs, Inc. was terminated on September 29th. The one-page report does not explain the reasons for the SEC’s investigation, its start date, or the reasons for its closure.
SEC spokesperson declined to comment on potential investigative actions.
Dapper Labs Response
Dapper Labs stated to Fortune magazine, “We have not been contacted by the SEC and are not aware of this investigation, but it appears to be closed.”
Dapper Labs Lawsuit and Layoffs
Dapper Labs faced a class-action lawsuit in which plaintiffs alleged that the NBA Top Shot Moments issued by the company were unregistered securities. However, this lawsuit was dismissed by a federal judge in February last year.
Additionally, Dapper Labs has undergone multiple rounds of layoffs during the bear market.
SEC vs. NFT
Following the collapse of FTX, the SEC has steadily filed a series of lawsuits against cryptocurrency companies, including TRON Foundation, Terraform Labs, Binance, Coinbase, Kraken, and most recently Uniswap.
Regarding the NFT space, the SEC imposed a $6 million fine on Impact Theory in September last year and a $1 million fine on Stoner Cats two weeks later, with the destruction of all their NFTs.
This seems to indicate that the SEC’s regulatory focus has expanded to the NFT sector.
Philip Moustakis, a securities lawyer at Seward & Kissel, stated to Fortune magazine, “The SEC’s decision to end its investigation into Dapper Labs may represent a correction in the SEC’s regulatory approach, which has given some relief to market participants in the NFT space. However, it does not mean that all NFT projects are in the clear, as some NFTs may still constitute securities transactions.”
[Image: Dapper Labs logo]
[Image: SEC logo]
Further Reading:
Uniswap Lawsuit with SEC Finalized? Legal Expert Points Out Potential Reasons for SEC’s Defeat
Uniswap Receives Wells Notice, Founder Vows to Fight SEC to the End