According to a recent article in Fortune Magazine, it came to light that Dapper Labs, a well-known NFT company, had been under SEC investigation until September 2023.
Based on an internal document from Fortune, it appears that the probe was unexpectedly wrapped up, with several matters remaining unexplained.
Dapper Labs Investigation Terminated By SEC Chief
According to the report, David Hirsch, who heads the SEC’s crypto and cyber unit, concluded their investigation into Dapper Labs, Inc. on September 29th. Unfortunately, the report does not provide information about the reasons for launching the probe, how long it lasted, or what led to its termination.
Significantly, the SEC failed to include the five-page suggestions that came with their report, and a representative refused to confirm or deny the ongoing investigation when asked about it.
The SEC choosing to end its probe into Dapper Labs is their first move following agreements with Impact Theory and Stoner Cats. This signifies the SEC’s initial responses towards the NFT sector.
The agency maintained that both initiatives involved the offering and sale of “unregistered securities,” potentially breaking federal law according to their argument. It’s important to note that Dapper Labs is currently dealing with a class action lawsuit. The accusers claim that NBA Top Shot Moments, which are NFTs sold by Dapper Labs, can be classified as unregistered securities.
Caution Still Necessary?
The Securities and Exchange Commission (SEC) ending its probe into Dapper Labs, a prominent company in the NFT sector, could bring relief to market participants.
Yet, it’s important to note that not every NFT comes with a guarantee of safety. The Securities and Exchange Commission (SEC) has hinted that certain NFT deals might be classified as securities trades.
According to legal advisors like Philip Moustakis from Seward & Kissel, who specialize in securities law, the SEC’s decision to conclude its investigation into Dapper Labs does not automatically clear them of any potential misconduct or put an end to securities-related lawsuits.
It’s worth noting that the legal battle between Dapper Labs and the plaintiffs in the class action lawsuit over alleged unregistered securities in NBA Top Shot Moments is still making its way through the federal courts.
SEC’s Ongoing Crackdown
In 2017, Dapper Labs drew notable recognition with the debut of CryptoKitties, an innovative blockchain game where users could produce and exchange unique digital feline NFTs as collectible cartoon cats. The accomplishment of CryptoKitties paved the way for prominent investors to showcase their interest.
In 2022, the NFT market took a significant hit and as a result, Dapper Labs had to let go of some employees. Despite this setback, the company continued to grow its footprint with Top Shot, a NBA-supported platform for buying and selling NFT video highlights.
The SEC’s efforts to regulate the cryptocurrency industry through enforcement actions haven’t let up, as evidenced by recent developments, even though the specific case discussed earlier has been resolved.
On Wednesdays news, Bitcoinist announced that Uniswap Labs, the creators of the decentralized exchange (DEX) Uniswap, received a warning notice from the regulatory authority.
An SEC Wells Notice signifies that the investigation conducted by the staff has ended, implying they may propose taking enforcement steps against the company based on their discoveries.
Read More
- BCH PREDICTION. BCH cryptocurrency
- BTC PREDICTION. BTC cryptocurrency
- LUNC PREDICTION. LUNC cryptocurrency
- MNT PREDICTION. MNT cryptocurrency
- USD PHP PREDICTION
- SOL PREDICTION. SOL cryptocurrency
- USD MYR PREDICTION
- ZKJ PREDICTION. ZKJ cryptocurrency
- PSTAKE PREDICTION. PSTAKE cryptocurrency
- USD COP PREDICTION
2024-04-12 04:11