The Securities and Exchange Commission ready to crack down in billions of dollars NFTs But one SEC doesn’t think the SEC should drop the hammer so quickly.
SEC, according to reportsis currently investigating Yuga Labs. Boad Ape Yacht Club— for securities violations. However, the commission has so far not issued a statement specifically regarding his position on NFTs, leaving the creator uneasy and frustrated about how to navigate what is seen as an ambiguous regulatory environment. I feel
And they have a sympathetic ear for the SEC itself. Her SEC Commissioner, Hester Peirce, is affectionately known within the industry as her “Crypto Mom.”
“I think the SEC has made very little clarity [on NFTs]’ said Perth. Decryption“There is a lot of ambiguity. [of regulation]”
Peirce is one of five president-appointed commissioners in the bipartisan SEC, and she has long rejected the SEC’s approach to cryptocurrency regulation in general and NFTs in particular.
“I’ve been saying this for two years,” Peirce said. “A good government approach is to make the law clear, and when people break it, they take enforcement action. No, at least we need a clear baseline.”
Peirce feels the SEC is taking the opposite approach when it comes to NFTs.
NFT is unique blockchain-based token It is used to prove ownership of digital assets that have exploded in popularity over the past two years.
In January alone, the NFT market reached $5.36 billion in organic trading volume, surpassing 2021’s all-time high of $25 billion in sales. Since the cryptocurrency crash in May, those giant numbers have been roughly declining. $1 billion in monthly NFT transactions Volume.
Still like big companies meta When twitter recently rolled out NFT compatibility on its social media platforms. This represents a concession for this new technology to take hold among the world’s largest tech companies.
Perth believes the SEC can easily provide a fair amount of clarity for NFT creators as they navigate mainstream adoption, but federal agencies, for one reason or another, refuse to provide that guidance. selected.
“We could have done it at any time. We have the mechanism to do it,” Peirce said. “We could work on some sort of group exemption order where we could say, ‘If you meet these conditions, you’ll be fine under securities law.’ We could draft some kind of Krasno action letter that said, “If you do these things, we are unlikely to recommend enforcement action against you.” she said.
“You can do it whenever you want, but we just don’t do it,” Peirce said.
Beyond certain guidelines that may need to be adjusted for NFTs, Peirce said Decryption that there are certain classical characteristics of securities that project creators should avoid in order to avoid violations;
“How close is it to what is in the realm of traditional securities? A share of the project’s proceeds? Is it fragmented and sell a portion of it? Do you have a claim?” Peirce said. “You know, it’s kind of like marking something as a stock or a bond.”
Peirce would not comment on whether specific NFT project actions constitute a securities violation.But she’s been working with BAYC, CryptoPunks, and Tsukidori Can be classified as securities.
These and other similar projects, which earn billions of dollars in secondary sales, claim to be works of art that provide community perks and social benefits to their owners, not investment products. Peirce said any decision regarding the security status of each of these collections should be reduced to the “facts and circumstances” specific to the case.
Other legal experts, such as University of Kentucky law professor Brian Fire, was told before Decryption A collection of NFTs like BAYC is very likely to be classified as a security.“What you are buying is part of the Bored Ape Yacht Club and the value of your NFT will scale with the value of the Bored Ape Yacht Club brand,” said Fyre.
Peirce said, for her part, it’s not what she says. she said.
But if the way Chairman Gary Gensler’s SEC has approached cryptocurrencies and NFTs to date is any indication, that guidance isn’t likely to come out anytime soon.
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