- The head of the SEC’s Crypto Task Force believes NFTs are ideal for fundraising purposes
- Hester Peirce said that NFTs used for raising funds shouldn’t be classified as securities
- Peirce disclosed that the SEC may soon enact regulations to address NFT-based fundraising
The SEC Crypto Task Force head Hester Peirce believes that securities laws shouldn’t tie down crypto projects using NFTs to raise funds. Peirce said the United States securities regulator shouldn’t classify NFTs used in fundraising events as securities, adding that the SEC may enact laws to address NFT-based fundraising. She also said that the SEC “could provide some kind of framework” to guide NFT creators, indicating the SEC is shifting from its regulation-by-enforcement model to issuing clear NFT-specific rules.
SEC Considering NFT-Specific Regulations?
Speaking to Decrypt during its recent crypto roundtable, she said the SEC may focus on clarifying how NFTs are regulated. Peirce noted that the regulator is likely to release a statement removing some NFTs from its purview as it did with proof-of-work mining.
Collectibles likely to be removed from the SEC’s jurisdiction include art NFTs and those created for fundraising purposes. Actress Mila Kunis’ Stoner Cats is among NFT projects that stepped on the SEC’s toes for using collectibles to raise funds.
Peirce, however, clarified that NFTs structured as securities, such as those featuring tokenized securities, will not “be carved out” from the regulator’s reach. Congress is also deliberating on what constitutes NFT-based fundraising.
An Act to Safeguard NFTs
Last month, two congressmen pushed to include the NFT Act in an amended version of the Financial Innovation and Technology for the 21st Century Act (FIT21). The NFT Act sought to include some legal safeguards for NFTs.
Peirce’s comments come as the SEC is repealing some of its former chair’s regulatory approach. The regulator, for example, has dropped cases against NFT projects and firms like Yuga Labs and NFT marketplace OpenSea.
With Peirce hinting at the SEC providing clear NFT regulations, it’s to be seen how it will categorize different types of NFTs.
