In September, the SEC conducted a covert investigation into Dapper Labs, which was concluded in December 2023.
Fortune obtained a “Case Closing Report” signed by David Hirsch, the head of the SEC’s Crypto Asset and Cyber Unit, on Sep. 29, 2023.
The report did not disclose the reasons for the SEC’s inquiry into Dapper Labs, its start date, or the factors that led to the investigation’s closure. Dapper Labs is known for its prominent NFT projects like NBA Top Shot and CryptoKitties.
The specific details of the SEC’s scrutiny of Dapper Labs and the rationale for closing the case remain undisclosed. Fortune also mentioned that Dapper Labs should be informed about the SEC’s investigation into its operations.
The decision to wrap up the investigation into Dapper Labs followed settlements with two other NFT ventures, Impact Theory and Stoner Cats, making them the first targets of the SEC’s actions against the NFT market. The SEC alleged that these ventures were involved in the sale of securities without proper registration, violating federal laws.
Moreover, Dapper Labs is currently facing a separate legal challenge in the form of a class action lawsuit. The lawsuit claims that NBA Top Shot Moments, digital collectibles sold as NFTs, are unregistered securities. In February 2023, a federal judge rejected the dismissal of the lawsuit, indicating that the argument that these NFTs are securities had validity.
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