SEC Scrutinizes NFT Market Over Illegal Crypto Token Offerings

The U.S. Securities and Exchange Commission is scrutinizing creators of NFTs and the crypto exchanges where they trade to determine if some of the assets run afoul of the agency's rules, Bloomberg News reported Thursday, citing people familiar with the matter. From the report: A focus of the probe is on whether certain nonfungible tokens, digital assets that can be used to denote ownership of things like a painting or sports memorabilia, are being utilized to raise money like traditional securities, said the people. Over the past several months, attorneys in the SEC's enforcement unit have sent subpoenas demanding information about the token offerings. The inquiry is the latest attempt by the SEC under Chair Gary Gensler to ensure the crypto market adheres to its regulations. In February, the commission and state regulators levied a record $100 million fine against BlockFi, a popular virtual-currency exchange, for failing to register products that pay customers high interest rates to lend out their digital tokens.

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