Digital Art May Be Next In The SEC’s Crosshairs

July 15, 2021  |  The Insider: White Collar Defense and Securities Enforcement

Like many other things, art and collectibles have gone digital. This year has seen explosive growth for NFTs, with NFT sales for 2021 already exceeding $2.5 billion. With the growing market for NFTs comes innovation, most notably the emergence of f-NFTs (“fractional non-fungible tokens”).  Where financial innovation goes, the SEC is bound to follow. F-NFTs are no exception. Although perhaps not intending to rain on the creative parade, in March 2021 comments, SEC Commissioner Hester M. Peirce sounded a note of caution, warning creators of f-NFTs to be careful that they are not creating securities that would be subject to regulation.

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