The U.S. Securities and Exchange Commission (SEC) has reportedly concluded its investigation into Dapper Labs, the company behind NBA Top Shot and CryptoKitties, and the FLOW blockchain. However, a legal battle persists as the firm faces a class-action lawsuit alleging unlicensed securities regarding NBA Top Shot Moments. Despite the investigation’s end, uncertainties linger as the lawsuit progresses, with all depositions expected to conclude by June 17.

Dapper Labs witnessed rapid growth in the digital collectibles space since launching CryptoKitties in 2017, further propelled by NBA Top Shot’s success. However, the NFT industry experienced a downturn in 2022, leading Dapper Labs to downsize its workforce in 2023 amidst plummeting sales volumes. These changes occurred within a regulatory environment scrutinizing crypto-focused businesses, especially after the FTX exchange’s downfall.

While the SEC’s investigation closure might have been anticipated relief, the ongoing class-action lawsuit continues to weigh heavily on Dapper Labs. The outcome of this legal battle remains uncertain, posing challenges despite the company’s past successes in the NFT space.