2 min read

SEC Going After NFTs? Reports Say Regulator Concerned About Illegal Token Offerings

By News Desk

The U.S. Securities and Exchange Commission is reportedly looking into the legality of certain elements of the non-fungible token (NFT) space, and considering whether some NFT activity may violate securities laws.

According to a report from Bloomberg, the SEC is launching a probe into whether certain NFTs are being used to raise money in the same way that traditional securities raise money. In other words, the SEC, headed by Chair Gary Gensler, may believe that NFTs are unregistered securities, the same argument used against Ripple Labs in the ongoing lawsuit filed December 2020.

Bloomberg says that over the last several months, attorneys from the SEC’s enforcement unit have sent subpoenas asking for information regarding NFT offerings, though no particular projects were named.

The SEC is also supposedly seeking information regarding fractional NFTs, or pieces of an NFT broken up into shares. The people familiar with the matter asked not to be named publicly.

Image via Shutterstock

While Chair Gensler has been more vocal about his desire for a hardline crypto regulatory framework, Hester Peirce aka “crypto mom” has been famously more accommodating to the industry, including towards NFTs.

In January, Peirce told CoinDesk that she expected increased scrutiny on NFTs from the SEC given the rapid growth of the industry.

“I think that’s an area where people do need to be careful,” she said. “I think we’ll see during 2022 an increasing fractionalization of NFTs because these are valuable assets.”

In January, Peirce told Roll Call that using NFTs to represent shares in a company would probably be something that would go against securities laws.

“As a regulator, I mean it’s something that I’m watching because the growth has been pretty astounding… I’m sure people are thinking about ways that they can use the idea of an NFT in the financial space.

It does make sense, in any of these emerging areas where there’s a potential for securities laws to apply, for us to say here are some of the things people ought to be thinking about…”

NFTs dominated the crypto markets in 2021, reaching $117 billion in volume by the fourth quarter with roughly 2.7 million active wallets. Currently, the market remains in a correction with the rest of digital assets.

Newsletter Inline

Latest Posts

Trader Joe Review
Trader Joe Review 2022: Complete Guide to the Top DEX on Avalanche
Trader Joe Review

Trader Joe Review 2022: Complete Guide to the Top DEX on Avalanche

July 2, 2022 30 min read
Huobi Global Review
Huobi Global Review 2022: Good Exchange with DEEP Liquidity
Huobi Global Review

Huobi Global Review 2022: Good Exchange with DEEP Liquidity

June 29, 2022 37 min read
FTX vs FTX US Review
FTX vs FTX US: Which one is BEST for You?
FTX vs FTX US Review

FTX vs FTX US: Which one is BEST for You?

June 27, 2022 14 min read
Bancor Review
Bancor Review: Impermanent Loss Protector?
Bancor Review

Bancor Review: Impermanent Loss Protector?

June 22, 2022 15 min read
Bridge Mutual Review
Bridge Mutual: Insurance for your Crypto
Bridge Mutual Review

Bridge Mutual: Insurance for your Crypto

June 22nd, 2022 22 min read
Serum Review
Serum Review: Solana’s One-Stop DeFi Toolbelt
Serum Review

Serum Review: Solana’s One-Stop DeFi Toolbelt

June 16, 2022 17 min read
Raydium Review: Solana’s DeFi Liquidity Mammoth

Raydium Review: Solana’s DeFi Liquidity Mammoth

June 11, 2022 17 min read

Related Posts

Trader Joe Review
Trader Joe Review 2022: Complete Guide to the Top DEX on Avalanche
Trader Joe Review

Trader Joe Review 2022: Complete Guide to the Top DEX on Avalanche

July 2, 2022 30 min read
Huobi Global Review
Huobi Global Review 2022: Good Exchange with DEEP Liquidity
Huobi Global Review

Huobi Global Review 2022: Good Exchange with DEEP Liquidity

June 29, 2022 37 min read
FTX vs FTX US Review
FTX vs FTX US: Which one is BEST for You?
FTX vs FTX US Review

FTX vs FTX US: Which one is BEST for You?

June 27, 2022 14 min read
Bancor Review
Bancor Review: Impermanent Loss Protector?
Bancor Review

Bancor Review: Impermanent Loss Protector?

June 22, 2022 15 min read
Bridge Mutual Review
Bridge Mutual: Insurance for your Crypto
Bridge Mutual Review

Bridge Mutual: Insurance for your Crypto

June 22nd, 2022 22 min read
Serum Review
Serum Review: Solana’s One-Stop DeFi Toolbelt
Serum Review

Serum Review: Solana’s One-Stop DeFi Toolbelt

June 16, 2022 17 min read
crypto com
Crypto.com Exchange Review 2022: A World-Class Crypto Exchange
crypto com

Crypto.com Exchange Review 2022: A World-Class Crypto Exchange

June 14th, 2022 30 min read