NBA Top Shot NFTs May Qualify as Security, Will it Affect Ripple v. SEC Lawsuit?

Lawyer says Dapper Labs’ NBA Top Shot Moments NFTs decision will not impact the Ripple lawsuit.

Several rumors about the Ripple v. SEC legal battle have emerged after a US district judge denied Dapper Labs’ request to dismiss a lawsuit alleging that its NBA Top Shots Moments NFTs are securities. Over the past few hours, some cryptocurrency proponents feared that the Dapper Labs’ ruling would significantly affect the outcome of the Ripple v. SEC lawsuit.

To address these concerns, a US-based lawyer, MetaLawMan, shared an analysis of why he believes the Dapper Labs’ ruling will not impact the ongoing Ripple lawsuit.

1/ A federal judge in New York has ruled that a complaint "plausibly alleges" that Dapper Labs' initial sale of NBA Top Shot NFTs qualifies as a security under the Howey test.

I don't believe this ruling should impact the analysis in the @Ripple case.

And here's why…

— MetaLawMan (@MetaLawMan) February 22, 2023

Why Dapper Labs’ Ruling Will Not Affect Ripple Lawsuit

MetaLawMan clarified that the court’s decision on the Moments NFT is focused on dismissing a complaint alleging that the NFT is security. However, he said Ripple’s case is currently at the summary judgment stage, with Judge Analisa Torres analyzing the evidence submitted by the parties.

MetaLawMan added that the Moments NFT ruling did not consider secondary market sales of the digital collectible, while the Ripple case includes XRP secondary market transactions.

“The Judge emphasized in his opinion that the underlying facts matter because: Not all NFTs offered or sold by any company will constitute a security,” said MetaLawMan. 

The lawyer also noted that a significant difference between the cases is that the Judge in the Dapper Labs’ lawsuit highlighted that the Moments NFTs are traded on a private blockchain created by the issuer. In contrast, Ripple-affiliated tokens are sold on a public blockchain. 

“For this reason, the Top Shot opinion could be considered a net positive for Ripple,” he added. 

Deaton Provides Further Clarification

Members of the cryptocurrency community have been commenting on the recent court’s ruling regarding Dapper Labs’ NBA Top Shot Moments NFT. For context, Judge Victor Marero denied a motion filed by Dapper Labs to dismiss the complaint, alleging that the NFT is a security. However, the rumor is that Judge Marero ruled that Moments digital collectibles and all NFTs are securities.

Regarding the development, pro-XRP lawyer John Deaton noted that the Judge never ruled that NFTs are securities. 

He said Judge Marero only denied Dapper Labs’ motion to dismiss the complaint against the firm. Deaton added that the development is not news and should not surprise anyone because such a request is barely granted.

“The only way this would be news or a surprise is if the judge had granted the motion to dismiss,” Deaton said. 

FYI, the true rumor here is that the Judge gave a decision stating NFT’s are securities. That did NOT happen. He simply denied a motion to dismiss, which is RARELY granted. The only way this would be news or a surprise is if the judge had granted the motion to dismiss. https://t.co/WTXlhaYhs4

— John E Deaton (@JohnEDeaton1) February 22, 2023