Intro/Disclaimer: Since late 2022, I’ve prepared weekly updates for attorneys at my firm to stay abreast of the latest Web3 legal developments. The biggest stories are included in Bi-Weekly posts on the firm’s BitBlog, where we provide concise tl;dr overviews and insights into how these developments might ripple through the industry. In pursuit of a more thorough and personal discourse, I also share expanded versions of these updates on my personal blog every Tuesday. Here, you’ll find my unvarnished perspectives, offering a deeper dive into the nuances of these legal narratives. Please note, the views and opinions I express, both on BitBlog and my personal blog, are solely my own. They do not reflect the official stance or endorsement of my firm.
It was relatively quiet last week, with the proposed Dapper Labs settlement being the only real major story. As we get closer to elections, we are going to see less and less substantive legislation to talk about, but more and more talk will be around crypto-related campaigning. We have also had a lull in the litigation side of the industry, which should be broken up shortly with the Kraken oral arguments this week and multiple cases pending in Texas.
Here’s everything that happened last week in Web3 law:
Dapper Labs Settled NBA Top Shot Securities Class Action
Dapper has agreed to a tentative settlement of $4 million in the class action alleging the sale of NBA Top Shot NFTs were securities transactions. While the settlement still needs to be approved by the Court, if this stands it seems like a good result for the company after losing their Motion to Dismiss largely due to the Court finding the centralized flow blockchain make the efforts of others issue an issue of fact. Dapper would have likely spent more than $4 million in litigation and discovery if taken to trial, so this is an easy out for them.
Tl;dr: Dapper gets liability protection for all sales from when it was the only market in town to buy and sell their NFTs, and can now use the cover of additional marketplaces as cover for lawsuits going forward. Seems like a win for Dapper, as $4 million should barely make a dent in the company’s bottom line. Dapper CEO Roham released a Tweet claiming the settlement affirms that it was agreed that Flow blockchain was a decentralized public network and Top Shot NFTs are not securities.
Other Stories
Coinbase has also now donated $25 million to crypto super PAC Fairshake, bringing its funding up to $75 million from Coinbase, Ripple, and a16z alone. That can buy a lot of battleground state advertisements…
The House Financial Services Subcommittee on Digital Assets held a hearing regarding tokenization of real-world assets. The anti-crypto crowd on the committee (Sherman, Casten, and Lynch primarily) ignored the massive bipartisan support in the House for FIT 21 and the topic of discussion to generally complain about outdated tropes of fraud and crime on public and immutable ledgers, which for the millionth time, is simply dumb. However, most of the focus was over the various benefits for cheaper and faster settlements and improved transparency that integration of blockchain technologies into transactions can offer.
Coinbase’s integration of base and the Coinbase smart wallet has been an excellent move in removing friction for users to actually use the crypto they purchase. At this point, for ETH layer 2’s, it is Base, Polygon, then everybody else in my mind.
Speaking of Polygon, they have gone all in on zero knowledge technologies, investing over $1 billion at this point in research and acquisitions. That’s a lot of capital for technology which is still a few years away from being workable or accepted by all accounts.
Not really a crypto story, but the SEC had their administrative overreach struck down again, this time by the 5th Circuit which determined the SEC did not have the authority enact rule directed at private funds advisors. SEC stacking up losses. Hate to see it.
Vitalik isn’t the biggest fan of celebrity meme coins. Not sure who was expecting he would be touting the Iggy Azalea token as the highest/best use for blockchain technologies, but those expectations were dashed with this news.
Fifteen members of Congress have signed a letter urging executive action to bring home detained U.S. citizen/Binance executive Tigran Gambaryan. This is one of those stories that should be getting more news.
Spot Bitcoin ETFs got almost a billion dollars in net inflows in a day last week, and analysis are expecting spot Ether ETFs to get $4 billion+ by end of year. Both of which I rate as “very cool” developments.
This was a pretty solid recap on the various politicians who spoke at Consensus and their takes on FIT 21.
The American Securities Association has filed a lawsuit against the SEC in the Middle District of Florida alleging the agency has failed to comply with certain Freedom of Information Act requests regarding the agency’s enforcement actions of off-channel broker/dealer communications during COVID when those individuals were unexpected shifted to work from home. And the DDOS attack of lawsuits and associated necessary agency resources continues.
Senator Mark Warner (D-VA) has apparently tried to add in some of his and Senator Warren’s crypto killing spy-bill language into the Intelligence Authorization Act for Fiscal Year 2025 (starts around page 67 of the PDF). While there are plenty of opportunities to remove this language, this is something that needs to be killed with fire because the IAA is a must-pass bill every year.
Sandbox did its latest raise at a $1 billion valuation. I don’t personally get it, but the kids love Minecraft so as far as immersive metaverses go, Sandbox has as good of a chance to emerge as the first to get mainstream adoption.
Robinhood is buying crypto exchange Bitstamp to expand crypto operations outside of the United States. So much for current policy not shifting money from the U.S. to companies outside the U.S.
VanEck is projecting Ether to hit $22,000 per coin by 2030 and as an ETH bag holder, I think this is an objectively good projection supported by fundamentals I didn’t read.
The DOJ is prosecuting the guys behind the 2021 NFT rug pull Evolved Apes. While there were plenty of rugs around that time, these guys likely got a target on their backs after Vice covered the scam. Classic case of pigs get fat, hogs get slaughtered.
Conclusion
If you have any questions or would like me to write about anything else, let me know on Twitter (X?) or Warpcast. As always, I am an attorney, I am not your attorney. For legal advice, you should always consult (and pay for) an attorney.
The NFTtorney 