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March 2, 2022

U.S. Securities And Exchange Commission (SEC) Launches NFT Investigation

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A non-fungible token (NFT) is a record of digital asset ownership. When an NFT is created, its unique hash and timestamp are added to a (typically public) blockchain. Over time, NFTs and the practice of tokenization has become increasingly complex as more individuals enter the space.

The U.S. Securities and Exchange Commission (SEC) launched an investigation into fractional NFTs, with the agency contending that fractional NFT offerings resemble traditional securities offerings. As part of the investigation, the SEC subpoenaed a number of NFT creators and marketplaces. The agency will use information it gathers to determine whether NFTs “are being utilized to raise money like traditional securities” when the NFT is fractionalized into tradable shares.

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