On Feb. 22 came the publication of what will surely become an instant classic application of the Howey Test, part of a 64-page opinion written by Judge Victor Marrero of the U.S. District Court, Southern District of New York. In denying the motion by Dapper Labs and its CEO to dismiss an unregistered securities offering case brought against them, the court provided one overarching lesson: If you market NFTs [non-fungible tokens] using your own private blockchain and marketplace, then you should probably hire a good compliance lawyer beforehand. Acknowledged by the court as the first case to decide whether an NFT constitutes an investment contract under the famous Howey Test, Judge Marrero allowed the putative class-action lawsuit Friel v. Dapper Labs, Inc. to proceed past a motion to dismiss. Marrero focuses on several attributes common to several other NFT projects, namely the use of a private blockchain network and a native token backed by the founder of the network.

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