SEC secretly investigated NFT developer Dapper Labs in 2023

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The SEC secretly investigated Dapper Labs in September but closed the case in December 2023.

A document obtained by Fortune, labeled as a “Closure File” and autographed by David Hirsch, who leads the Securities and Exchange Commission’s (SEC) Crypto Assets and Cybersecurity Unit, is dated September 29, 2023.

The SEC’s probe into Dapper Labs lacked transparency regarding the cause, start time, and conclusions of the investigation. Notably, Dapper Labs is responsible for popular NFT initiatives like NBA Top Shot and CryptoKitties.

The details regarding why the SEC investigated Dapper Labs and ultimately decided to close the case are not publicly known. Fortune magazine reported that Dapper Labs was likely aware of this investigation.

After reaching settlements with Impact Theory and Stoner Cats, two other NFT companies, the SEC has decided to conclude its investigation into Dapper Labs. This marks the first time the Commission has taken action against the NFT market, as it believed these entities were illegally selling securities without proper registration, violating federal laws.

Currently, Dapper Labs is dealing with a different legal issue through a class action lawsuit. The complaint asserts that the NBA Top Shot Moments, which are digital collectibles sold as NFTs, are actually unregistered securities. In February 2023, a federal judge refused to dismiss this lawsuit, implying that there was validity to the argument that these NFTs qualify as securities.

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2024-04-11 18:27