However, Gharegozlou said on X that “after discovery, it was understood and agreed that [the Flow blockchain] is a decentralized public network and that digital collectibles like [Top Shot Moments] are not securities in the same way trading cards are not securities.”
Counsel for the purchasers did not immediately respond to a request for comment on Tuesday.
Throughout the litigation, which began in New York state court in May 2021 before being removed to federal court that summer, Dapper undertook certain actions that mitigated the securities-like characteristics of the sale, according to the settlement. That included relinquishing control of the Flow blockchain, permitting other marketplaces to sell Top Shot tokens, and correcting certain withdrawal delays.
The settlement saw Dapper acknowledge that the litigation was a “substantial contributing factor” to making these changes and commit to their upkeep, though there is no admission of wrongdoing. The firm will also transfer certain holdings of Flow tokens to a decentralized entity for the upkeep of the ecosystem and conduct employee training on securities laws, marketing, and an internal code of conduct.
