How Ripple’s case may be impacted following SEC’s run-in with the NBA

ambcrypto.com:

On 22 February, a New York court judge refused to dismiss a class-action lawsuit filed against Dapper Labs for allegedly offering Non-Fungible Tokens [NFTs] without first registering with the US Securities and Exchange Commission (SEC).

The lawsuit claimed that Gharegozlu and Dapper Labs violated federal securities laws by offering the NBA Top Shot Moments NFT collection without first registering with the SEC.

The decision on the motion to dismiss this class-action lawsuit comes more than a year and a half after the class-action lawsuit was filed in New York. In September 2022, Dapper Labs filed a motion to dismiss the lawsuit, claiming that its collection of digital basketball cards is not a security.

The ruling claimed that Dapper Labs’ FLOW tokens, while not necessarily securities, are critical to the overall scheme at issue. This has fueled speculation that the NFT collection “might be” securities, which may impact Ripple’s SEC case.

District Judge Victor Marrero of the Southern District of New York ruled:

“The Court finds that Plaintiffs’ allegations render each consideration under Howey facially plausible and survive Defendants’ Motion to Dismiss the alleged violation of Sections 5 and 12 of the Securities Act.”

Plaintiffs claimed that without FLOW tokens, no Flow Blockchain transactions can be validated. Indeed, the Flow Blockchain’s ‘Proof-of-Stake’ mechanism requires FLOW to power it and incentivize miners to validate transactions. Therefore, FLOW’s utility adds value to Moments by allowing the network to agree on ownership and the price of each transaction.

Judge Marrero added:

“The Court is persuaded that the [plaintiff’s complaint] adequately alleges pooling to survive the Motion to Dismiss.”

He also cited plaintiffs’