With the rise of illegal activity in the non-currency token (NFT) markets, the US Securities and Exchange Commission (SEC) has launched a new wave of investigations io these markets and the makers of NFTs.
According to Coielegraph, the US Securities and Exchange Commission, led by Gary Gensler, who has a skeptical view of digital currencies, has launched an investigation io possible cases of unregistered securities among NFT creators and markets.
Also read: Report: Increasing use of NFTs in criminal activities
Anonymous sources claim that the Securities and Exchange Commission is investigating whether certain non-traditional tokens (NFTs) are being used to raise money, like traditional securities!
Over the past few mohs, lawyers from the Commission’s executive branch have se several subpoenas demanding information about certain NFTs and token offerings.
Over the past year, the Commission’s focus has been on digital currency lending projects, and now we are witnessing a strong ery of the Commission to investigate NFTs. The Commission is particularly ierested in examining the use of divisible NFTs. These NFTs can be divided io smaller units to sell them separately.
Of course, market participas have been seeing the warning signs of these investigations for some time. In March of last year (March 2019), Hester Peirce (Crypto Mom) warned that the sale of divisible NFTs may violate the law.
Preferably don’t create something that is known as an investme product, because that thing is classified as a security.
The investigation is the latest in a wave of legal actions that have been launched recely aimed at further corolling the cryptocurrency market. Recely, the United States Securities and Exchange Commission fined BlockFi, a digital currency lending company based in New Jersey, USA, with an unprecedeed $100 million fine for not including the phrase “High Ierest: Lending Product as Securities”.
Bitcoin and Ethereum are not included in these reviews because the SEC does not consider them securities (at least not yet); But other digital assets have not been so lucky, notably Ripple Labs, XRP’s pare company, which has been embroiled in a lawsuit since late 2020 over unregistered securities sales.
