SEC Starts Investigation Of The NFT Market Over Potential Securities Violations• March 5, 2022 1:04 pm • Comments
Similar to the Ripple vs. SEC lawsuit that debates on whether XRP is considered a security, the SEC has launched a similar type of investigation for the NFT market.
Several NFT markets and creators have already been targeted by the agency such as BlockFi which was ordered to pay a fine of $100 million.
In the past two years, NFT markets such as OpenSea and LooksRare have grown significantly in transaction volume prompting the SEC to look for other potential violations such as copyright infringement.
The most important revelation here is that the SEC is determining whether or not NFTs can be used in a similar fashion as traditional securities to raise money.
Many are speculating that this recent move holds much similarity to the lawsuit that the SEC has launched against Ripple in recent years.
— CoinDesk (@CoinDesk) March 2, 2022
SEC is investigating whether certain non fungible tokens are being utilized to raise money like traditional securities
While crypto loaning items have been the subject of extraordinary administrative examination throughout the most recent year, this report denotes a significant move into researching the NFT area.
The request shows that the SEC is taking a specific interest in how fragmentary NFTs are being utilized. That is the place where a more significant NFT is tokenized into more modest pieces and sold.
The admonition signs have been clear for some time with Hester Peirce, otherwise called Crypto Mom, expressing back in March 2021 that selling fractionalized NFTs could be overstepping the law.
You should be cautious that you’re not making something a speculation item – that is a security.
SEC Commissioner Hester Peirce has mentioned that there is likely to be some overlap within the NFT market that would collide within the securities world.
Many within the crypto industry are also involved with the NFT markets as well and have stated that the situation here is identical to crypto where they should not be considered securities.
If the agency targets specific NFTs to be securities, it could be a slippery slope for the rest of the NFT market to also be considered securities.
The same argument lies for the crypto industry where the result of the Ripple vs. SEC lawsuit will likely determine the SEC’s actions towards the rest of crypto in the future.
SEC Now Targets NFTs After Ripple Lawsuit Debacle https://t.co/NSB7nfYTeN
— 🇳🇱 MACKATTACK XRP 🇳🇱 (@MackAttackXRP) March 3, 2022
While Bitcoin (BTC) and Ether (ETH) have had the option to stay away from investigation attributable to the way that they aren’t viewed as protections by the SEC – at any rate, not yet – other advanced resources have not partaken in a similar relief.
Dissimilar to the case with Ripple Labs the parent organization of Ripple (XRP), which has been entangled in a legitimate case overselling unregistered protections since late 2020.
NFT deals have kept on developing, ridiculing the ebb and flow market decline with the best two NFT trades LooksRare and OpenSea sharing $10.7 billion in exchanging volume throughout recent days.
Y’all must think we are dumb and uneducated huh? 🤨
— JasonMaxim.eth ✊🇺🇦✊ (@jasonmaxim) March 5, 2022
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