SEC secretly investigated NFT developer Dapper Labs in 2023

The SEC secretly investigated Dapper Labs in September but closed the case in December 2023.

The document, acquired by Fortune and referred to as a “Case Closing Report,” was signed off by David Hirsch, head of the SEC’s Crypto Asset and Cyber Unit, on Sep. 29, 2023.

The report did not detail the reasons for the SEC’s inquiry into Dapper Labs, its initiation date, or the factors leading to the investigation’s termination. Dapper Labs is behind high-profile NFT projects such as NBA Top Shot and CryptoKitties.

The specifics behind the SEC’s probe into Dapper Labs and the reasons for closing the case remain undisclosed. Fortune also noted that Dapper Labs must be aware of the SEC’s investigation into its activities.

The move to conclude the investigation into Dapper Labs comes after the SEC reached settlements with two other NFT ventures, Impact Theory and Stoner Cats, marking the Commission’s first actions against the NFT market. The SEC had argued that these entities were involved in offering and selling securities without proper registration, thus breaching federal laws.

Meanwhile, Dapper Labs faces a separate legal challenge through a class action lawsuit, alleging that its NBA Top Shot Moments, digital collectibles sold as NFTs, constitute unregistered securities. In February 2023, a federal judge ruled against dismissing the lawsuit, suggesting that the claim that these NFTs are securities had merit.