In the most recent cryptocurrency regulatory quagmire, the Securities and Exchange Commission (SEC) scrutinizes NFTs and the crypto market places they are traded. The SEC is probing NFTs to determine if they are being utilized to raise money like traditional securities are.
This inquiry is yet another contributor to the everchanging debate of “if cryptocurrencies or blockchain assets are securities (and they most certainly are—sometimes), how should they be regulated and treated?”
Christopher Warren, Managing Partner at Warren Law Group, states, “An NFT is a blockchain-bound authentication token that can (and often is) transferred for large sums of fiat (dollars) or digital “currency” (BTC). These NFTs can be (and are) “invested” in by DAOs and private individuals. These NFTDAOs (and by extension, the NFTs) are not always securities, even if they are indexing real physical property or digital assets, such as Hunter Biden’s “art” or a Russian Oligarchs (paying attention DOJ?) purchase of his favorite NFT Gorilla. The SEC treating all NFTs as always being security misses the boat, and would be like using the Howie test as Vacuum Bomb (like Russia!) instead of a carefully implemented scalpel.”
If you are the developer of an NFT or want to create a DAO that invests in digital assets, you must be familiar with regulatory guidelines for these assets. These rules are constantly evolving, and the most reliable way to ensure you are up to date and in compliance with federal regulations is by seeking experienced legal counsel. Contact the attorneys at Warren Law Group by email at email@example.com, or call (866) WLGROUP to schedule your complimentary consultation.