SEC investigates NFT market regarding possible rule breaches
The global NFT market is expected to increase to $3.5trn in 2030
The US Securities and Exchange Commission (SEC) is investigating non-fungible token (NFT) creators and the crypto exchanges where they trade in order to assess whether securities rules have been breached.
This is according to what people familiar with the matter, but who wished to remain anonymous, told Bloomberg.
A focus of the SEC probe is to find out whether NFTs can be used to raise money, like traditional securities do. During the last several months, SEC attorneys have sent subpoenas demanding information regarding NFT offerings.
Fractional NFTs
The SEC review involves looking for information on fractional NFTs, which break down the assets into units that can be bought and sold.
The global NFT market is expected to increase to $3.5trn (£2.61trn) in 2030 as increasing demand for a decentralised marketplace is boosting market revenue growth, driven by the increasing use of NFTs in supply chain and logistics. This is according to Emergency Research.
Gary Gensler, chair of the SEC, wants to make sure cryptos abide by regulatory rules.
In September 2021, Gensler spoke virtually before the European Parliament and made repeated calls for improved regulatory scrutiny in the crypto assets sector.
Gensler used to be a professor at the Massachusetts Institute of Technology (MIT) university where he taught a blockchain and money course to students.
Huge increase year-on-year in NFTs
According to Chainalysis, the blockchain data platform, roughly $44bn (£32.88bn) of crypto was sent to smart contracts on the Ethereum (ETH) blockchain tied to NFTs during 2021, this is a massive increase from $106m (£79m) in 2020.
Still, despite the SEC investigating the NFT creators and crypto exchanges, crypto enthusiasts have countered with those regulations are meant to police the equity markets and should not apply to all digital currencies.
