May 25, 2022

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The Securities and Exchange Commission is investigating the NFT market for possible securities violations: reports

The Securities and Exchange Commission is investigating the NFT market for possible securities violations: reports

The US Securities and Exchange Commission (SEC), led by crypto-skeptic Chairman Gary Gensler, is reported to be investigating NFT creators and Markets for securities violations, according to a Bloomberg report.

unknown sources in Transfer The allegation that the SEC is investigating whether: “Some non-fungible tokens … are used to raise funds like traditional securities.”

Over the past few months, lawyers from the law enforcement agency of the Securities and Exchange Commission lonliness They reportedly sent subpoenas to demand information on specific NFTs and other token offerings.

While the cryptocurrency lending products were The subject of a major regulatory scrutiny Over the past year, this report represents a major step in the investigation of the NFT sector. The inquiry shows that the Securities and Exchange Commission (SEC) is particularly interested in How NFTs Fractions are used. This is where the most valuable NFTs are turned into smaller pieces and sold.

Warning signs have been clear for some time, as Hester Peirce, aka Crypto Mom, stated in March 2021 that Retail NFTs sale can break the law.

“You’d better be careful not to create something that’s an investment product – that’s a security”

This investigation is the latest in a wave suppress it It seeks to control the cryptocurrency market more firmly. Recently, the New Jersey-based cryptocurrency lender was ordered by the Securities and Exchange Commission (SEC) BlockFi has paid a record fine of $100 million for its failure to list high-yield lending products as securities.

While Bitcoin and Ethereum have managed to avoid scrutiny due to the fact that they are not considered securities by the SEC (at least, not yet), other digital assets have not enjoyed the same deferral period, Most notably Ripple Labs The parent company of XRP, which has been embroiled in a legal case over the sale of “unregistered securities” since late 2020.

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Related: SEC Can’t Locate BitConnect Founder Convicted in $2.4 Billion Fraud

NFT sales continued For growth, underestimating the current market downturn – with the two largest NFT exchanges looks rare And the open sea Shared $10.7 billion in trading volume over the past 30 days.