Foley & Lardner LLP Of Counsel Andy Lee authored the article, “Dapper Labs: A 'Private' Joke or Much Ado About Nothing?,” published in The New York Law Journal.
In Friel, a federal judge declined to dismiss a class action complaint alleging securities law violations, finding that the Plaintiffs plausibly alleged that the NFTs sold on through the blockchain marketplace for digital collectibles established by Dapper Labs and the National Basketball Association could be securities. Lee explores the significance of the case - the first federal court decision expressly addressing the question of whether non-fungible tokens are securities under the Howey test - for the blockchain industry.
“The Friel decision is significant as the first published opinion applying the Howey test to NFTs. It is instructive for those seeking to learn about NFTs and ways they might implicate securities laws,” Lee wrote. “The decision’s “narrow” scope and its identification of several outcome-determinative issues requiring evidentiary resolution, however, significantly limit the potential substantive impact of this decision on the industry generally.”