NFTs News

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.

US regulatory agency is looking into possible securities violations in the NFT industry

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.

US regulatory agency is looking into possible securities violations in the NFT industry

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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Annie

CoinCu News

Annie

Championing positive change through finance, I've dedicated over eight years to sustainability and environmental journalism. My passion lies in uncovering companies that make a real difference in the world and guiding investors towards them. My expertise lies in navigating the world of sustainable investing, analyzing ESG (Environmental, Social, and Governance) criteria, and exploring the exciting field of impact investing. "Invest in a better future," I often say. That's the driving force behind my work at Coincu – to empower readers with knowledge and insights to make investment decisions that create a positive impact.

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