It’s Saturday, which means it’s time to head to the NFT circus and see what the clowns had in store for us this week.
Could NFTs be Classed as Securities?
The case against Nathanial Chastain has been labelled as a way for the Securities and Exchange Commission (SEC) to regulate the asset class and have NFTs classed as securities. That’s according to Chastain’s lawyer, David Miller, who recently filed a motion to dismiss the SEC’s case against Chastain for inside selling on Opensea, where he worked.
The SEC has previous with regulating by enforcement, and warnings over its approach to this case have been coming. No one thinks the SEC would be above using a single lawsuit to enforce regulation on an entire market, and the classing of NFTs as securities would have huge ramifications for all NFT exchanges, who would undoubtedly issue their own legal challenge if this were to happen.
Over $100 Million in NFT Thefts in the Last Year
More than $100m worth of NFTs were stolen in the year to July, according to blockchain analytics firm Elliptic, with criminals making off with an average of $300,000 per scam. Elliptic revealed the tactics that NFT thieves use to steal the pieces of digital art, including phishing scams, hacking social media accounts of NFT brands, hiring advertising space for fake projects, and even through Trojan Horse NFTs.
In its NFTs and Financial Crime report, Elliptic also revealed that the headline-making Tornado Cash mixer was the laundering tool of choice for 52% of NFT scam proceeds before being sanctioned by OFAC this month, and suggested that “Its prolific use by threat actors engaging with NFTs further emphasizes the need for effective sanctions screening by NFT platforms.”
Chingari Ushers in Video NFTs
Popular Indian social platform Chingari this week advanced the NFT sector by introducing video NFTs (vNFTs) on its platform. The app, which boasts over 100 million registered users, will allow certain creators to make and upload vNFTs, which can then be sold to anyone, registered or not.
Chingari has baked in an incentive to hold rather than trade, with vNFT holders afforded 10% of the GARI tokens earned by the creator on the platform. In this way, the growth and success of the creator is passed on to their supporters.
Chingari has positioned itself as a challenger to Tiktok, and received a literally overwhelming boost when Tiktok was banned in India in April – the platform couldn’t cope with the influx of new users and went temporarily offline.