Summary:
Hester Peirce of the SEC suggests NFTs used in fundraising may receive an exemption from securities regulations.
NFTs could follow the precedent set by proof-of-work crypto mining, which was declared non-securities.
Stoner Cats and Flyfish Club are prime examples of successful NFT fundraising projects.
If approved, SEC's statements could signal a new era for projects using tradable NFTs for fundraising.
Congress is considering legislation to protect NFT sales offering perks like memberships and merchandise.
SEC's Stance on NFTs
At a recent crypto roundtable, SEC Commissioner Hester Peirce expressed that projects using NFTs for fundraising, like Stoner Cats, might soon be exempt from securities regulations. This follows a positive response to the SEC's recent statement on proof-of-work crypto mining, which clarified its non-security status.
The Role of NFTs in Fundraising
NFTs are digital tokens on blockchain networks like Ethereum and Solana, often associated with digital art and sold as tradeable assets. The NFT market peaked at $25 billion in late 2021, with many crypto entrepreneurs leveraging NFTs to raise substantial funds.
Peirce noted that a similar statement regarding NFTs could help establish a framework for NFT issuers, enhancing clarity in the marketplace. She highlighted that certain NFTs, particularly those linked to projects like Flyfish Club and Stoner Cats, could be categorized as non-securities.
Examples of Successful NFT Fundraising
- Stoner Cats, an animated series produced by Mila Kunis, raised approximately $8 million through NFT sales, granting holders exclusive viewing access and generating royalties from secondary market transactions.
- Flyfish Club raised over $14 million to build a private restaurant, with NFTs providing membership access and similar resale royalties.
Future Implications
If the SEC issues a statement similar to those about proof-of-work mining and meme coins, it could open the door for projects utilizing tradable NFTs with perks for fundraising. However, Peirce cautioned that not all NFTs would be exempt, especially if they are structured as tokenized securities.
Legislative Developments
Congress is also considering legislation to protect certain fundraising activities through NFT sales. Some lawmakers are advocating for language in bills that would legalize selling NFTs that offer perks like memberships, merchandise, or artwork.
Comments