Dapper Labs $4M Investor Settlement
Dapper Labs has agreed to settle $4M with investors to resolve claims that it sold unregistered securities and restricted cash withdrawals, artificially inflating the value of NBA Top Shot Moments.
Outline
In 2021, Dapper Labs was accused of selling unregistered securities and restricting cash withdrawals on the Flow blockchain. This inflated the value of NBA Top Shot Moments and raised transaction fees. After these payout issues, concerns grew about liquidity and market manipulation, and investors filed a lawsuit.
Timeline
October 2020 – NBA Top Shot Moments gained popularity, generating millions in sales on the Dapper Labs platform.
March 2021 – Investors experienced withdrawal restrictions, with some experiencing weeks or months-long delays in accessing their funds.
May 12, 2021 – Investors filed a lawsuit, alleging that Dapper Labs sold unregistered securities and manipulated the market.
November 2024 – Dapper Labs settled to resolve investor claims.
Background
Dapper Labs launched NBA Top Shot in 2020, introducing digital collectibles known as Moments—unique video highlights of NBA games that could be bought, sold, and traded on its Flow blockchain.
The platform gained massive popularity, generating millions in sales and attracting many new users. By early 2021, NBA Top Shot had processed over $230 million in transactions, with some Moments selling for six figures.
However, as demand surged, users reported significant delays in accessing their funds, as Dapper Labs required lengthy processing times for cashouts. The company’s control over the Flow blockchain meant that NBA Top Shot transactions were confined within its ecosystem, limiting liquidity and restricting the ability of users to move their funds freely.
By mid-2021, Dapper Labs was accused of artificially inflating the value of Moments while increasing transaction fees, which sparked regulatory scrutiny. Soon, investors filed a lawsuit against Dapper Labs over selling unregistered securities and misleading users.
What Can Investors Expect Now?
Dapper Labs has agreed to settle $4M with investors to resolve claims that it sold unregistered securities and restricted cash withdrawals, artificially inflating the value of NBA Top Shot Moments.
If you were damaged due to this situation, you can file for a payout and get your share of the settlement. You can check if you are eligible and other details in the FAQ section below.
Frequently Asked Questions
All persons who purchased or otherwise acquired NBA Top Shot Moments during the period from June 15, 2020, to December 27, 2021.
No, if you have purchased securities within the class period, you are eligible to participate.
You can participate in the settlement and retain (or sell) your securities.
The entire process usually takes 4 to 9 months after the claim deadline. But the exact timing depends on the court and settlement administration.
The final payout amount depends on your specific trades and the number of investors participating in the settlement.
If 100% of investors file their claims - the average payout will be $0.12 per share. Although typically only 25% of investors file claims, in this case, the average recovery will be $0.48 per share.
11thestate is an investor recovery company, we help investors to track and collect securities class action settlements. We will:
1. Prepare documents for your payout
2. Audit the claim and make sure you get the maximum possible payout
3. File a claim with the settlement administration
4. Correspond with the settlement administration to resolve emerging issues
5. Deliver payout directly to your brokerage account
There is no upfront cost, but we will deduct 20% of the recovered amount as a commission for our services.