SEC Commissioners Like Hester Peirce Dispute Agency's Enforcement Action Against NFTs

Odaily Planet Daily News US SEC Commissioners Hester Peirce and Mark Uyeda raised objections to the SEC's enforcement actions to treat NFT sales as securities, partly because they disagreed with the application of the Howey test. Specifically, the SEC does not have sufficient basis to bring this into its jurisdiction. Several of the company and buyer statements cited in the order are not promises to constitute an investment contract. Even if NFT sales were fully compliant with Howey's regulations, the series of facts would not be sufficient to warrant enforcement action. Since this is the first enforcement action against NFTs, it raises a number of difficult questions. The SEC is long overdue to address these issues and provide guidance as NFTs begin to take off. Having a discussion about NFTs now could help the SEC approach this wisely, eg: NFTs are not a single-use-case asset class, different NFTs have multiple use-cases, does the SEC have an efficient way to classify NFTs to think about securities laws Does and how does it apply to offers and sales? According to news yesterday, the SEC accused Los Angeles-based media and entertainment company Impact Theory of conducting an unregistered offering of encrypted asset securities in the form of NFT, raising approximately $30 million from hundreds of investors, including investors across the United States.