Social media â with Tik Tok being the primary medium these days â illustrates the continued power of the internet to lift people from obscurity to international stardom. Haliey Welch is a perfect example. The 22-year-old went viral in the summer of 2024 after a street interview where she used the term “hawk tuah” to describe a sex act, which led to her being known as Hawk Tuah Girl. She used her fame to sell…
On August 16, 2024, a federal district court judge in Florida denied in large part the motion to dismiss brought by basketball legend Shaquille OâNeal in the case in which he was sued for his role in Astrals Project, concerning NFTs. An NFT (non-fungible token) can be thought of as a unique cryptographic key contained within a digital token on the blockchain that verifies the corresponding content file as genuine. It is most often used…
Dapper Labs is the company that was known originally for CryproKitties. That ran on the Ethereum blockchain. But Dapper Labs then developed its own blockchain, called Flow, to house NBA Top Shot, its co-venture with the NBA. Top Shot is best known for selling âMoments,â which are often compared to sports trading cards. Dapper Labs clips NBA highlights and turns them into NFTs (non-fungible tokens), which can be bought and sold. In May 2021, a…
One of the issues that we, and much of the rest of the crypto community, have been following for many years is the battle between the crypto industry and the SEC on the issue of whether crypto assets are securities. In November 2022, a federal district judge in New Hampshire held that the LBRY token was a security. On July 13, 2023, a federal district judge in the Southern District of New York ruled that Ripple Labs’…
In November 2023, the German Parliament adopted the Act on Financing of the Future (Zukunftsfinanzierungsgesetz, âZuFinGâ), which will allow German stock corporations to issue stock âon chainâ (crypto-shares). This is achieved by amending the existing German Act on Electronic Securities (âeWpGâ) and the stock corporation law. However, a few requirements will need to be fulfilled. In particular, a change from a traditional paper-based issuance to crypto shares will require that all existing shareholders agree, which…
We recently reported on the first NFT enforcement action brought by the U.S. Securities and Exchange Commission. On September 13, 2023, the Commission brought its second, against Stoner Cats 2 LLC (SC2), the entity responsible for the cartoon series Stoner Cats. The animated Web3 series featured the voices of Ashton Kutcher, Mila Kunis, Chris Rock, Jane Fonda, Seth MacFarlane and others. The series is about the adventures of cats who learned to talk after inhaling…
We previously reported on the Friel v Dapper Labs decision, which was a first-of-its-kind decision in the U.S. courts, holding that an NFT (non-fungible token) can be a security under U.S. securities law. On August 28, 2023, the U.S. Securities and Exchange Commission brought its first NFT enforcement action, against Impact Theory, LLC, a media and entertainment company headquartered in Los Angeles. It read very much like the SEC’s actions concerning cryptocurrency. As in those…
On July 13, 2023, Judge Analisa Torres of the United States District Court or the Southern District of New York issued an Order on competing motions for summary judgment in the closely followed SEC v. Ripple Labs, Inc. litigation. As the first court decision to broadly address the question of whether a cryptocurrency itself is a security, as the SEC has maintained it is in most circumstances, the Order may have broad implications to the state of…
The recent decision rendered by Judge Victor Marrero of the Southern District of New York is of critical importance to the NFT industry. For the first time, a court held that the issuer of an NFT offered an “investment contract” and, therefore, can potentially be held liable for selling unregistered securities. The decision was made in the context of denying Dapper Lab’s motion to dismiss in Friel v Dapper Labs — meaning that, at the…
On November 18, 2022, the U.S. Securities and Exchange Commission issued an order instituting administrative proceedings against American CryptoFed DAO LLC (“American CryptoFed”), an issuer of digital assets, to determine whether a stop order should be issued denying or suspending the effective date of the registration of the Ducat and Locke tokens (the âTokensâ) under the Securities Act of 1933 (the âSecurities Actâ). The SECâs Enforcement Division (“Enforcement”) alleges that American CryptoFed’s Form S-1 registration statement…