Dapper Class Action Lawsuit: $5M Privacy and $4M Securities Settlements

The Dapper Labs class action lawsuits have produced two major settlements: a $5 million agreement resolving privacy claims under the Video Privacy Protection Act, and a separate $4 million agreement resolving securities claims that NBA Top Shot “Moments” were sold as unregistered securities. Both have received final court approval, and a related $7.05 million settlement with NBA Properties over the NBA Top Shot website closed out a third privacy case.

The $5 Million Privacy Settlement

The privacy case, Ohebshalom v. Dapper Labs, Inc. (Index No. 615987/2025), was filed in the Supreme Court of the State of New York, County of Nassau.¹ Four named plaintiffs alleged Dapper Labs shared users’ personally identifiable information with third parties without consent, in violation of the VPPA.²

The core allegation involved tracking pixels from Meta, Google, Microsoft Bing, Snapchat, X, Reddit, and TikTok embedded on Dapper’s product websites. According to the complaint, these pixels captured the titles of videos users purchased or viewed and transmitted that data to the pixel operators without the consent the VPPA requires.² Five platforms were affected: NBA Top Shot, NFL All Day, Disney Pinnacle, UFC Strike, and La Liga Golazos.³

Who Was Covered and What They Received

Anyone who held an account on any of the five platforms between June 15, 2020, and January 30, 2025, was included in the settlement class unless they opted out.¹ Class members who filed a valid claim were eligible for a cash payment of up to $5, paid through Zelle, PayPal, or Venmo. If the number of valid claims exceeded the available cash, individual payments would be reduced proportionally.³

The $5 million gross fund covers all class member payments, administration costs (capped at $150,000), attorneys’ fees, and service awards for the four named plaintiffs. After those deductions, roughly $3.33 million was available for class payments.¹

Beyond the money, Dapper Labs agreed to stop running the specified third-party tracking pixels on any pages where the title of a video purchased or viewed could be captured, unless the VPPA is amended or the company obtains compliant consent.²

Deadlines and Current Status

The court granted preliminary approval on December 19, 2025. The claims deadline was April 15, 2026, and final approval was granted on April 30, 2026. Payments are set to issue 45 days after final approval and resolution of any appeals.⁴³ The claims window has closed; if you did not submit a claim by the deadline, you are not eligible for a payment from this fund.

The Related NBA Top Shot Privacy Settlement

A separate privacy case, Fan v. NBA Properties, Inc. (Case No. 3:23-cv-05069-SI), was filed in the U.S. District Court for the Northern District of California in October 2023 against NBA Properties and Dapper Labs. It alleged the defendants installed a Meta tracking pixel on nbatopshot.com that transmitted users’ video consumption habits and Facebook IDs to Meta without consent.⁵

That case settled for $7.05 million and received final court approval on December 19, 2025. Class members — U.S. residents who held both a Facebook account and an NBA Top Shot account during the relevant period — received estimated payments of $36 to $122. Payments went out on March 19, 2026, and the defendants agreed to suspend the Meta pixel on nbatopshot.com.⁶⁷ The Ohebshalom settlement carved out existing claims from Fan, keeping the two matters distinct.¹

The $4 Million Securities Settlement Over NBA Top Shot Moments

The securities case, Friel v. Dapper Labs, Inc., et al. (Case No. 1:21-cv-05837-VM), was filed May 12, 2021, in the U.S. District Court for the Southern District of New York. Plaintiff Jeeun Friel alleged that Dapper Labs and CEO Roham Gharegozlou violated the Securities Act of 1933 by selling NBA Top Shot Moments as unregistered securities.⁸

The Ruling That Drove the Settlement

On February 22, 2023, Judge Victor Marrero denied Dapper Labs’ motion to dismiss in what commentators described as a first-of-its-kind application of the SEC v. W.J. Howey Co. test to NFTs.⁹ The court found the plaintiffs had plausibly alleged all four Howey prongs. Central to the ruling was the “walled garden” nature of the Dapper Labs ecosystem: Moments could only be traded on a company-controlled marketplace running on the proprietary Flow blockchain, making their value dependent on Dapper’s continued operation.¹⁰ The court also pointed to Dapper’s social media marketing, writing that posts featuring rocket ship, money bag, and stock chart emojis “objectively mean one thing: a financial return on investment.”

The ruling was deliberately narrow. The court emphasized it was a pleading-stage decision based on the specific economic realities of Dapper’s system, and that each NFT project must be assessed individually.⁹

Who Was Covered and What They Received

The settlement class included anyone who purchased or acquired NBA Top Shot Moments between June 15, 2020, and December 27, 2021. Based on more than 33 million Moments sold during that period, the gross average recovery worked out to roughly $0.12 per Moment, or about $0.08 after deductions for fees and expenses.¹¹

Dapper Labs also agreed to business changes: ensuring the Flow blockchain remains permissionless, allowing Moments to be traded on third-party marketplaces, and training employees on marketing compliance to avoid implying investment value.¹¹ The agreement stated it was not an admission of wrongdoing, and Gharegozlou and other officers were released from all claims.¹²

Judge Marrero granted final approval on October 28, 2024, finding the settlement fair, reasonable, and adequate, and dismissed the case with prejudice.⁸ The claims process for that case is closed.

What the SEC Did

Separate from the private lawsuits, the U.S. Securities and Exchange Commission conducted its own investigation into Dapper Labs and closed it on September 29, 2023, without recommending any enforcement action, according to an internal Case Closing Report obtained by Fortune. The report was signed by David Hirsch, who headed the agency’s Crypto Asset and Cyber Unit.¹³

The scope and start date of the investigation were not disclosed. A Dapper Labs spokesperson said the company “was never contacted by the SEC and as a result were unaware of this investigation.” The SEC declined to comment, citing its standard policy of not confirming or denying investigations.¹³

Why These Cases Matter

The Dapper Labs litigation has shaped how courts think about NFTs. The Friel ruling was among the first federal decisions to apply the Howey securities test to NFTs, and its focus on the walled garden model flagged a specific risk factor for any company running a closed NFT ecosystem where the issuer controls the blockchain, the marketplace, and effectively the asset’s value.¹⁰ With the SEC declining to pursue its own action, the private class action and its resulting settlement remain the most concrete legal framework applied to the NFT-as-security question in the Dapper context.¹¹

The privacy cases, meanwhile, add Dapper Labs to a growing list of video-related platforms facing VPPA claims over third-party pixels. The injunctive terms — halting the pixels that captured video titles absent proper consent — apply going forward regardless of whether individual class members received meaningful cash.²

1
ClassAction.org. Ohebshalom v. Dapper Labs Settlement Agreement
2
ClassAction.org. $5M Dapper Labs Settlement Ends Class Action Lawsuit Over Alleged Data Sharing
3
Dapper VPPA Class Action Settlement. Frequently Asked Questions
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Dapper VPPA Class Action Settlement. Dapper VPPA Class Action Settlement
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GovInfo. Fan v. NBA Properties, Inc.
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NBA Top Shot Video Privacy Class Action Settlement. Frequently Asked Questions
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NBA Top Shot Video Privacy Class Action Settlement. NBA Top Shot Video Privacy Class Action Settlement
8
Justia. Friel v. Dapper Labs, Inc. Et Al., Order and Final Judgment
9
Skadden. Suit Alleging NBA Top Shot NFTs Were Securities Survives
10
Patterson Belknap Webb & Tyler. NBA-Branded NFTs May Be Securities, S.D.N.Y. Finds
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Friel v. Dapper Labs Settlement. Friel v. Dapper Labs Settlement
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Friel v. Dapper Labs Settlement. Dapper Stipulation of Settlement
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Fortune. SEC Dapper Labs Investigation Case Closed