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id: 1389
Dapper Labs $4M Investor Settlement
The settlement terms have been submitted to the court for approval.
$4,000,000
Cash SettlementS.D. New York
Court 1:21-cv-05837
Case number06/15/2020
Class period Start12/27/2021
Class period EndDapper 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.
Case Status
Stipulative Settlement
Alleged Offence
Misleading Statements,
Financial Misrepresentation,
Fraud
Suspected Party
Directors,
Management
Security Type
Crypto Asset
Trade Direction
Long
Payout per Share
0.12
Filing date
12/27/2021
Plaintiffs
Gary Leuis
Attorneys
The Rosen Law Firm, P.A.
Defendants
Roham Gharegozlou
Judge
Victor Marrero
Administrator
Strategic Claims Services
Attorney fee
$1,373,332
Trades matching type
FIFO
Frequently Asked Questions
Who is eligible for this settlement?
Do I have to sell securities to be eligible?
How long does the payout process take?
How much will my payment be?
What is 11th Estate?