Dapper Labs has announced a favorable settlement in the Friel v. Dapper Labs class action lawsuit, arguing that its flagship NBA Top Shot Moments do not qualify as securities under federal law. According to the company, the resolution helps reduce legal uncertainty around digital collectibles and allows it to continue operating in the market with clearer footing.
A closely watched NFT securities case
The lawsuit was brought against Dapper Labs and its co-founder and chief executive officer, Roham Gharegozlou. Plaintiffs had alleged that NBA Top Shot Moments, which are issued as NFTs, should be treated as unregistered securities. The case drew significant attention because it was described as the first major attempt to apply the Howey test to NFTs, making it a potentially influential matter for future digital asset regulation.
Following the settlement, Dapper Labs reiterated its position that NBA Top Shot Moments are not securities. Gharegozlou said the company was pleased with the result, calling it an important step forward not only for Dapper Labs but also for the broader Flow blockchain community.
Focus returns to products and ecosystem growth
In the company’s view, greater legal clarity means it can spend more time on its core mission of delivering better user experiences rather than dealing with prolonged uncertainty. Gharegozlou also said the outcome gives developers, partners, and entrepreneurs building on Flow more room to create consumer-facing Web3 applications for a global audience.
More broadly, the settlement matters because it touches one of the most important compliance questions in the NFT sector: whether digital collectibles should be viewed primarily as consumer products and community assets, or as instruments subject to securities rules. While the report did not disclose detailed settlement terms, Dapper Labs clearly framed the outcome as a meaningful legal milestone for both NBA Top Shot and the long-term development of the Flow ecosystem.