The Dapper Development lawsuit is a complex matter involving both blockchain/NFT litigation and a contentious real estate partnership dispute—two separate legal battles referenced as “Dapper Labs” and “Dapper Development.” This article offers clarity on the core issues, legal outcomes, and broader implications for digital asset regulations and business arrangements in 2025.
Dapper Development: Real Estate Dispute
Dapper Development, LLC is a real estate-focused partnership primarily engaged in constructing, renovating, and reselling single-family homes, alongside property acquisition and rental ventures. In June 2023, a lawsuit was filed in North Carolina concerning an internal dispute between members Mason Harris, Gelson, Tudor, and Andrew Cordell over the management and ownership structure. The action arose after the alleged termination of Cordell as a member/manager and contentious dealings related to company funds, bank account control, and the attempted sale of the “Winston Property.”
Plaintiffs claimed Cordell breached the operating agreement and refused a buyout offer, contesting that a “triggering event” warranted Cordell’s divestment per the contract. Cordell, in turn, resisted changes to financial strategy, engaged in alleged obstruction regarding property disposition, and disputed the procedures around his termination. The court found sufficient evidence to allow most grievances to proceed, emphasizing the importance of clear operating agreements and good faith business conduct.
Dapper Labs: The NFT Securities Lawsuit
The more prominent Dapper lawsuit involved Dapper Labs, the blockchain pioneer behind NBA Top Shot and CryptoKitties. In 2021, a class action was initiated by investors claiming Dapper Labs’ NBA Top Shot Moments NFTs constituted unregistered securities. Plaintiffs argued that the NFTs’ value depended on Dapper’s continued success and platform management—meeting the criteria of the Howey test for securities. Additional complaints accused Dapper of locking user funds, monopolizing the NFT marketplace, and restricting withdrawals.
After years of litigation, Dapper Labs agreed to a $4 million settlement in June 2024. The proposal included financial compensation, mandatory compliance training for employees, and structural changes to ensure decentralization of the Flow blockchain. Notably, the settlement bars plaintiffs from asserting that NBA Top Shot NFTs are securities going forward, aligning their legal treatment with trading cards rather than regulated financial assets. No regulatory authority has formally classified the NFTs as securities, and an SEC investigation was closed in 2023.
Key Outcomes of the Dapper Labs Case
- $4 million settlement paid to class members, attorneys, and administrators.
- Ongoing compliance and ethics training for Dapper Labs employees on federal securities laws.
- Relinquishment of control over Flow blockchain tokens to the Flow Foundation for greater decentralization.
- End to claims that NBA Top Shot NFTs are securities, offering some industry clarity.
- No finding of liability or formal regulatory action by the SEC regarding the NFTs.
Consumer Data Privacy Settlement
In August 2025, Dapper Labs and NBA Properties faced another significant legal milestone—a $7 million settlement related to consumer video and data privacy for NBA Top Shot NFT purchasers. Over 1.2 million customers benefitted from this agreement, which resolved allegations that tracking pixels secretly collected video data without user consent. This case, distinct from the securities action, highlights the importance of privacy compliance in NFT platforms.
Legal Significance and Industry Impact
Both Dapper Development and Dapper Labs lawsuits reflect the evolving legal risks that companies in real estate and blockchain sectors confront:
- Enforceable Business Agreements: The Dapper Development case underscores that clear, precise operating agreements are essential to avoid costly internal disputes.
- Regulatory Clarity for NFTs: The Dapper Labs settlement provides some guidance for NFT issuers, suggesting that digital collectibles are not securities if fairly marketed and decentralized, but leaves room for future challenges as technology and investment products evolve.
- Transparency and Ethics: Mandating compliance training and improving withdrawal speeds indicates growing industry professionalism and customer protection expectations.
- Privacy Concerns: The $7 million pixel privacy settlement affirms that digital platforms must be vigilant about data handling and transparency, especially when integrating tracking technologies.
Broader Implications for 2025
While the Dapper Development lawsuit is rooted in traditional real estate partnership law, the Dapper Labs litigation challenges the contours of financial regulation for emerging technologies. Companies issuing NFTs or operating in blockchain-related industries should monitor these cases for guidance on securities classification, platform decentralization, and consumer protection policies. For startups and established businesses alike, the lessons are clear: proactively clarify business relationships, structure offerings to comply with applicable laws, and maintain robust data privacy protections.
In sum, the Dapper Development lawsuit and associated Dapper Labs actions serve as milestones for legal and regulatory adaptation in both real estate and digital asset sectors for 2025, reinforcing the need for accountability, innovation, and transparent business practices.
