Last Updated on September 9, 2024 by Editor
This week’s newsletter delves at the noteworthy events in the non-fungible token (NFT) field, such as the recent introduction of an NFT collection by former US President Donald Trump and the Wells notice that the NFT marketplace OpenSea received from the US Securities and Exchange Commission (SEC). The responses of proponents of cryptocurrency to this regulatory action are also discussed, as is an executive from Web3’s perspective on the possibility that NFTs may be categorized as securities. Furthermore, in 2024, NFT sales volume fell below $400 million for the first time.
Trump Secures $2.2 Million in Sales with His Fourth NFT Collection
Donald Trump, a former US president and current presidential contender, entered the NFT scene for the fourth time with a trading card set named “America First.” When this collection was first released, it received a lot of popularity and brought Trump $2.2 million in cryptocurrency sales.
Not every response, though, was favorable. Several community members voiced their disapproval of Trump’s NFT endeavor, speculating that it might be viewed as a “grift” and casting doubt on the authenticity of his interactions with the cryptocurrency field.
SEC Notifies OpenSea Marketplace of Wells
The SEC has sent a Wells notice to OpenSea, the NFT marketplace, indicating that the agency may pursue legal action against the company in the future. The SEC claimed, according to OpenSea CEO Devin Finzer, that NFTs on the platform would be considered unregistered securities.
Finzer expressed worries that going after NFTs in this manner may “stifle innovation” and put creatives and artists in danger. He underlined that, should the SEC move forward with enforcement, many of these innovators lack the financial means to defend themselves in court.
Crypto Supporters React to the SEC’s OpenSea Notice
Several proponents of cryptocurrency flocked to social media in response to the SEC’s Wells notice to OpenSea, expressing their support for the company and criticizing the regulatory body’s position. The Crypto Council for Innovation’s chief legal and policy officer, Ji Kim, referred to the SEC’s claim that NFT platforms ought to be subject to securities exchange regulations as “utterly ridiculous” and “legally flawed.”
Representative Wiley Nickel of North Carolina expressed unhappiness with the SEC’s attitude on X, echoing these comments. Nickel contended that rather than imposing regulations, the SEC and Congress ought to work together to create just and transparent rules that will encourage innovation in the cryptocurrency sector.
Though the SEC’s Wells Notice to OpenSea was deemed “not productive,” lawyers argue that NFTs can be considered securities.
Although the SEC’s accusations have drawn criticism, some analysts think there may be circumstances when NFTs may be treated as securities. Oscar Franklin Tan, the chief legal officer of Web3 company Atlas Development, clarified in a Cointelegraph interview that certain NFTs can resemble investment goods and hence be classified as securities.
Tan emphasized that NFTs that resembled stock certificates or that promised dividends might be seen as securities. He did, however, stress that these are not the usual NFTs that one would expect on a platform such as OpenSea.
NFT Sales Volume Drops Below $400 Million Per Month, Reaching a Yearly Low
August saw a sharp decline in the NFT sector as digital collectibles sales volume dropped to $374 million, the lowest level since 2024. This is a 76% decrease from its record monthly sales of $1.6 billion earlier this year, according to data from CryptoSlam.
The average value of an NFT transaction increased by 27%, from $39.93 to $50.74, despite the overall decline. Nevertheless, within the same time frame, there was a 31% decrease in the overall number of transactions.
