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Blockchain Association Chief Legal Officer Says U.S. Court Rules Digital Assets on Private Blockchains Are Securities Following Federal Judge’s Decision Allowing Lawsuit Against Dapper Labs’ NBA Top Shots NFT to Unfold He said it would be “silly” to do so.
U.S. Attorney Jake Chell after federal judge Victor Malleo rejected a motion to dismiss a 2021 lawsuit accusing Dapper Labs of selling non-fungible tokens (NFTs) as unregistered securities. Binsky commented.
Czervinski, one of many on Twitter, said that the judge’s dismissal of the motion does not mean that the case has been ruled, and that it is “superficially plausible.” I have repeatedly said that it is.
“The judge decided nothing. allowed,” he explained.
“This controversy aside, it would be ridiculous if every valuable digital asset stored in a centralized database was a security.”
“This will transform every major video game developer, event ticket platform, travel rewards program, etc. into a public reporting company regulated by the SEC,” he explained.
This is incorrect.
The judge decided nothing. He allowed the case to proceed through a motion to dismiss on the grounds that the securities’ allegations were at least “plausible,” a very low standard, and not a final judgment.
Do I really have to say “Basketball cards are not securities”? ? ? https://t.co/W1yYVcW1Ki
— Jake Chervinsky (@jchervinsky) February 22, 2023
Another US attorney, Jesse Hines, also weighed In a February 22 Twitter post, he pointed out that motions to dismiss are “rarely successful” because plaintiffs only need to submit enough evidence to proceed with the case.
“The judge ruled that in the Dapper case, plaintiffs had presented sufficient evidence that a securities breach exists if all the allegations are true.”
“Now we go to discovery to find out what the real facts are. Once that’s done, Dapper will likely file a motion for summary judgment,” the attorney added.
Meanwhile, James Murphy, another U.S. attorney known as “MetaLawMan,” argued that Dapper Labs’ allegation that it issued NBA Top Shot Moment NFTs on a private blockchain led to the court’s decision to dismiss the allegations. pointed out to be the “fundamental” factor behind the dissolution.
4/ The judge cited the fact that Topshot is traded on a private blockchain operated by the issuer as a key factor in the ruling.@XRP Trade on public blockchains.
For this reason, Top Shot’s opinion can be seen as positive for Ripple.
Not a legal opinion, just a tweet.
— MetaLawMan (@MetaLawMan) February 22, 2023
This prompted MetaLawMan to suggest that, in Ripple’s own lawsuit against the U.S. Securities and Exchange Commission (SEC), this “could be considered net positive” because XRP is issued on a public blockchain. became.
Related: Dapper Labs suspends Russian accounts after new EU sanctions
A class action lawsuit against Dapper Labs was filed in May 2021 by plaintiff Jeeun Friel, who alleges Dapper Labs is selling NFTs as unregistered securities.
Judge Marreo denied the motion to dismiss the case on February 22. He believes that the particular scheme in which Dapper Labs offers his Moments NFTs has the potential to create sufficient legal relationships between investors and themselves to meet investment contract criteria under the Howey test. said there is.
However, Judge Malleo said that not all NFTs constitute securities and that each case must be evaluated on a case-by-case basis, so the final ruling in this case could establish a precedent for NFTs. sex is low.
Immediately after the dismissal, Dapper Labs-issued FLOW token dropped 6.4% from $1.24 to $1.16 in 15 minutes. However, the FLOW token has since rebounded at $1.29. according to to Coin Gecko.