The United States (US) Securities and Exchange Commission (SEC) is this time targeting creators and non-fungible token (NFT) market platforms in an effort to prevent legal offenses through investigations into these types of assets, whether securities or otherwise.
Based on official reports, the SEC wants to ensure NFT -related activities are clean from fundraising similar to what conventional securities do.
The SEC is more interested in the concept of fractionalized NFT (or fractionalized NFT) that allows multiple individuals to own a fraction per unit of the digital work.
The SEC has previously ruled that Bitcoin (BTC) is not a security because the asset is often used as a medium of payment.
While Ethereum also escaped being labeled as a security because the crypto project was completely decentralized without the control of any party.
Still, the SEC has been holding on to XRP since December 2020 because they believe Ripple Labs has made a sale of unregistered securities assets.
If what is rumored is true, it is not impossible that the NFT market is at high risk again after the industry explodes throughout 2021.
One of the crypto exchanges that took the initial step of not being targeted by the SEC was FTX US. The platform will explicitly not list NFTs that offer royalties to their owners on the secondary market if the assets are unregistered securities.
