Reports reveal that the U.S. Securities and Exchange Commission (SEC) has ended its investigation into Dapper Labs, the company behind notable NFT projects like NBA Top Shot and CryptoKitties, and the multi-purpose FLOW blockchain. But still, a legal battle continues.
Fortune reported that the SEC’s cryptocurrency and cybersecurity division, led by David Hirsch, ended its investigation into Dapper Labs on September 29. The reasons for both the initiation and conclusion of the probe remained confidential.
Nevertheless, despite the investigation’s end, Dapper Labs’ troubles persist. The web3 firm continues to face an ongoing class-action lawsuit that claims NBA Top Shot Moments are effectively unlicensed securities.
As this lawsuit progresses, with all depositions expected to be completed by June 17, Dapper Labs’ final legal outcomes remain uncertain.
Source: Dapper Labs (Top Shot)Dapper Labs’ Growth and Challenges
Since launching CryptoKitties in late 2017, Dapper Labs soon noticed rapid growth in the digital collectibles space. Momentum carried forward with the introduction of NBA Top Shot, which garnered endorsements from prominent basketball players and generated substantial trading activity.
Yet, the NFT industry saw a notable decline in the project in 2022, with plummeting sales volumes, compelling Dapper Labs to downsize its workforce in 2023.
Such transitions took place amid a broader regulatory environment, particularly after the downfall of the FTX exchange, with the SEC closely inspecting crypto-focused businesses.
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