SEC Probes NFT Creators And Marketplaces For Regulatory Violations

The U.S. Securities and Exchange Commission, which has taken a tough stance on crypto projects under Chairman Gary GENSLER, is investigating NFT creators and marketplaces for regulatory violations, according to a Bloomberg report citing anonymous sources with knowledge of the investigation.

According to the report, the investigation will examine whether NFTs are being used to raise money like traditional securities. The SEC has sent out subpoenas related to the investigation and is particularly interested in information about fractional NFTs, which allow multiple people to own and trade a share of an asset.

The report also states that the SEC is concerned that cryptocurrency projects are simply finding new variants of unregistered securities – this time as non-fungible tokens. Hester PEIRCE, known as "Crypto Mom" ​​for being industry friendly, stated in March 2021 that NFTs could raise the same questions as ICOs. She went on to warn investors that fractional NFTs could be considered non-registered securities.

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