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Dapper Labs makes 3rd round of cuts in 9 months amid NFT slump

July 13, 2023 Coin Telegraph

NFT collectibles company Dapper Labs has said goodbye to another 51 employees only months after a 20% staff reduction in February.

Nonfungible token collection and technology firm Dapper Labs has announced its third round of staff layoffs in less than a year.

On July 13, Dapper Labs CEO Roham Gharegozlou announced that the firm has said goodbye to “51 brilliant colleagues and friends.”

In a note to employees, he said that the latest round of cuts includes full-time staff and C1 contractors.

“The decision was incredibly difficult because of the amazing people affected,” he said before adding that it was necessary and the right thing to do to “ensure a lean and efficient” company.

Gharegozlou however reiterated that the Dapper Labs and Flow remained “well capitalized” before adding:

“With this restructure we have made the business more lean, which is going to let us do the right thing for our fans and grow our communities in the most healthy ways possible.”

We said goodbye to 51 brilliant colleagues and friends today @dapperlabs – this is the note I sent our team.

We remain fully dedicated to our core communities and committed to building amazing products that push the world forward together.

If you're looking to hire some of the… pic.twitter.com/xwhjZAYLN8
— roham (@roham) July 13, 2023

The cut represents around 12% of the company’s staff according to total employee figures from Growjo.com.

It is the third staff cut by the company in less than a year following a 22% downsize in employees in November 2022 and a 20% cut in staff in February 2023.

Cointelegraph reached out to Dapper Labs for further comments but had not heard back at the time of publication.

Dapper Labs is known for developing well-known collectibles such as CryptoKitties and NBA Top Shot.

The move comes amid a broader slump in NFT markets and trading. In April Cointelegraph reported that NFT markets were “out of balance,” with sellers dominating.

Furthermore, many of the big blue chip collections have seen massive declines in floor prices in recent months.

Sports and NFT commentator "Clegainz" said it wasn't a "huge surprise considering the current state of Web3 and the macroeconomic environment." They added that Dapper Labs was not alone as many Web3 companies were in a similar state at the moment.

Excerpt from @clegainz comments on Dapper Labs' staff cuts. Source: Twitter

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Disney reportedly scraps its metaverse division

March 28, 2023 Coin Telegraph

Bob Chapek

The metaverse division was originally put together to work on new ways to engage Disney’s audience.

Entertainment giant Disney has reportedly ditched its metaverse division as part of a broader restructuring plan that will see the firm cut its operating expenses by $5.5 billion and lay off 7,000 staff over two months.

The news was reported by the Wall Street Journal (WSJ) in a March 28 post, citing "people familiar with the matter."

All of the metaverse division’s 50 or so members will be left without a new employment contract, with the exception of Michael White, who led the broader consumer-products unit, the WSJ reported.

Disney has abandoned a plan to develop its own membership program like Amazon Prime, according to @RWhelanWSJ.

Disney has also eliminated the division that was developing metaverse strategies, according to the report. https://t.co/mSm92XtqE0 pic.twitter.com/e2KqbxAC8i
— Scott Gustin (@ScottGustin) March 28, 2023

The metaverse division is understood to have been created in February 2022 in an effort to create new ways by which Disney audiences can engage with its stories.

Disney also patented a “virtual-world simulator” which aimed to facilitate headset-free augmented reality (AR) attractions at Disney theme parks on Dec. 28, 2021.

The firm also once considered how it could integrate metaverse technology into sports betting. However, nothing serious progressed there.

The decision to cut operating expenses and staff count came following a consultation with McKinsey & Co to find cost-cutting opportunities, according to the report.

Unfavorable economic conditions and increased competition in the streaming sector were two of the main factors that led to the decision.

Both Disney’s former and current chief executives, Bob Chapek and Robert Iger once considered the Metaverse to be a very bullish investment opportunity.

Chapek has reportedly described the Metaverse to be “the next great storytelling frontier,” while Iger previously worked as a director and adviser in Genies, a digital avatar platform running on Dapper Labs’ Flow blockchain.

Cointelegraph reached out to Disney for comment but did not receive an immediate response.

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‘It would be absurd’ for a US court to rule private NFTs as securities: Lawyer

February 23, 2023 Coin Telegraph

Coin Telegraph

The comments from the hosts of lawyers comes as Judge Victor Marreo said that Dapper Labs’ NBA Top Shot Moments NFT may constitute a security.

Blockchain Association’s chief legal officer says “it would be absurd” for a United States court to rule that digital assets on private blockchains are securities, following a federal judge's decision to allow a lawsuit against Dapper Labs's NBA Top Shots NFTs to play out.

U.S. attorney Jake Chervinsky made the comment after federal judge Victor Marreo denied a motion to dismiss a 2021 lawsuit that accused Dapper Labs of selling nonfungible tokens (NFTs) as unregistered securities.

Chervinsky was among a host of lawyers on Twitter to reiterate that the judge’s denial of the motion does not mean a ruling has been made on the lawsuit, only that it was “facially plausible.”

“The judge didn't decide anything. He allowed the case to proceed past a motion to dismiss because the securities claims were at least ‘plausible,’ an extremely low bar and not a final ruling at all,” he explained.

“This dispute aside, it would be absurd if all valuable digital assets stored on centralized databases were securities.”

“This would turn every major video game developer, event ticketing platform, travel rewards program, etc. into a public reporting company regulated by the SEC,” he explained.

This is false.

The judge didn't decide anything. He allowed the case to proceed past a motion to dismiss because the securities claims were at least "plausible," an extremely low bar and not a final ruling at all.

Do I really have to say "basketball cards are not securities"??? https://t.co/W1yYVcW1Ki
— Jake Chervinsky (@jchervinsky) February 22, 2023

Another U.S. lawyer, Jesse Hynes, also weighed in on the motion in a Feb. 22 Twitter post, noting that motions to dismiss are “rarely ever successful” because the plaintiff only needs to plead enough evidence for the case to proceed.

“The judge ruled in the Dapper case that the plaintiff pled enough evidence that IF ALL THE ALLEGATIONS ARE TRUE, that there is a securities violation.”

“Now we go into discovery to learn what the real facts are. Once that is done Dapper will likely file for a motion for Summary Judgment,” the lawyer added.

Meanwhile, another U.S. lawyer, James Murphy — known as “MetaLawMan” — noted that the allegations that Dapper Labs issued the NBA Top Shot Moments NFT on a privately-run blockchain were a “fundamental” factor behind the court’s decision to reject the motion to dismiss.

4/ The Judge cited the fact that Top Shots trade on a Private blockchain run by the Issuer as a key factor in his ruling.@XRP trades on a Public blockchain.

For this reason, the Top Shot opinion could be considered net positive for Ripple.

Not a legal opinion--just a tweet.
— MetaLawMan (@MetaLawMan) February 22, 2023

This prompted MetaLawMan to suggest that this “could be considered a net positive” for Ripple in its own case against the U.S. Securities Exchange Commission (SEC), because XRP is issued on a public blockchain.

The class action lawsuit against Dapper Labs was filed in May 2021 by plaintiff Jeeun Friel, who claimed that Dapper Labs was selling NFTs as unregistered securities.

Judge Marreo denied the motion to dismiss the lawsuit on Feb. 22. He said that the particular scheme by which Dapper Labs offers the Moments NFT possibly creates a sufficient legal relationship between investors and themselves, which satisfies the investment contract criteria under the Howey Test.

However, it's unlikely the ultimate ruling of this case would establish a precedent for NFTs, as Judge Marreo said that not all NFTs will constitute securities and that each case will need to be assessed on a case-by-case basis.

Shortly after the dismissal, the Dapper Labs-issued FLOW token fell 6.4% from $1.24 to $1.16 in 15 minutes. However the FLOW token has since rebounded at $1.29, according to CoinGecko.

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