US regulatory agency is looking into possible securities violations in the NFT industry
The Securities and Exchange Commission (SEC) in the United States is apparently investigating a young segment of the digital NFT asset business for potentially illegal crypto asset offerings.
Anonymous sources familiar with the situation said the SEC’s investigation will focus on whether non-fungible tokens (NFTs) are being used to generate money in the same manner that traditional securities are.
The purpose of the agency is to decide whether NFTs qualify as securities and hence fall under the same federal regulations as stocks and other traditional commodities.
The SEC’s investigation will focus on fractional NFTs
Non-Fungible Token have been cut up into smaller units that can be traded, to see if they break any of the regulator’s rules.
This isn’t the first time the SEC has been on the lookout for illegal crypto activity. In a high-profile case in 2020, the government sued Ripple Labs, a San Francisco-based payments startup, for allegedly selling crypto asset XRP as an unregistered security.
Last year, pressure from the Securities and Exchange Commission (SEC) forced Coinbase to abandon plans to provide a high-yield stablecoin savings product.
Last month, the regulatory agency also reportedly secured an arrangement with BlockFi, a renowned crypto lending startup. The crypto finance startup agreed to pay the SEC $100 million to settle allegations that it was illegally providing items that acted as securities and were thus regulated.
The SEC has yet to make an official declaration about the NFT market investigation.
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