Mar 3, 2022

SEC is targeting the NFTs marketplace

The U.S. Securities and Exchange Commission is scrutinizing NFT creators, and the marketplaces where they trade, for regulatory violations.

The apex regulatory agency is inspecting whether certain non-fungible tokens that qualify as securities should fall under the regulatory ambit or not. They’re also trying to determine if some of the assets “run afoul of the agency’s rules.”

The SEC has not yet publicly disclosed the investigation details. However, the agency has reportedly sent subpoenas related to the investigation and is keenly interested in information about fractional NFTs that aid multiple people to HODL and trade a share of an asset.

As part of its review, the SEC is seeking information on so-called fractional NFTs, which involve breaking down the assets into units that can be easily bought and sold.”

Well, at this stage, regulators haven’t really been able to draw the line to distinguish between what is security and what isn’t.

The NFT marketplace had, however, been warned earlier. Hester Peirce, aka “Crypto Mom,” said in March 2021 that NFTs might “raise the same kinds of questions that ICOs have raised.”