This year, the SEC has ramped up its enforcement efforts against digital asset marketplaces for selling non-fungible tokens (“NFTs”) (and other digital assets) the agency alleges are securities. In response, some potential targets for SEC enforcement have proactively sued the SEC, challenging its jurisdiction to regulate digital assets and/or seeking a declaration that the digital assets are not securities. Escalating tensions further, several private plaintiffs have also filed civil lawsuits against NFT issuers and/or marketplaces. The SEC continues to decline to issue regulatory guidance or engage in rulemaking on whether NFTs qualify as securities, instead focusing on selective enforcement actions against specific NFT projects and marketplaces. These developments underscore the regulation-by-enforcement approach that has characterized the SEC’s treatment of the crypto industry under the Biden administration. However, as we discuss below, 2025 may mark a turning point in the NFT regulatory landscape.Continue Reading NFT Legal Issues
