Dapper Labs, an NFT developer, was discreetly investigated by the SEC in 2023.
In a discreet operation, the SEC launched an investigation into Dapper Labs back in September, concluding the probe in December 2023 without any public fanfare. Details of this investigation came to light through a document Fortune managed to obtain, known as a “Case Closing Report.” This document, endorsed by David Hirsch, the chief of the SEC’s specialized Crypto Asset and Cyber Unit, on September 29, 2023, left many questions unanswered, particularly regarding the motivation for the SEC’s interest in Dapper Labs, the start date of their scrutiny, or what prompted the decision to halt the investigation. Dapper Labs, the force behind renowned NFT initiatives such as NBA Top Shot and CryptoKitties, remains a significant player in the digital collectible space.
In related news, the SEC recently issued a Wells notice to Uniswap, signaling regulatory attention on another front. The specifics of the SEC’s examination of Dapper Labs and the rationale for discontinuing it are still under wraps. However, Fortune highlighted that Dapper Labs was likely aware of the SEC’s investigative eyes on its operations.
This development occurs in the backdrop of the SEC finalizing settlements with two other NFT ventures, Impact Theory and Stoner Cats, in a move that marked the regulatory body’s initial foray into taking action within the NFT marketplace. The SEC contended that these entities engaged in the offer and sale of securities without the necessary registrations, thus violating federal regulations.
Separately, Dapper Labs is navigating through legal hurdles, with a class action lawsuit alleging that its NBA Top Shot Moments, which are marketed as NFTs, should be classified as unregistered securities. This February, a federal judge decided not to dismiss this lawsuit, indicating there might be validity to the argument that these NFTs fall under securities classification.
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