In recent months, US Securities and Exmovement Commission legal counsels have issued summons to the NFT market creators and other crypto exevolutions, seeking additional information about their projects.

The SEC, led by crypto doubter, Chairman Gary Gensler, is reportedly moving to investigate whether NFT developers and marketplaces are bspreading to securities rules, numerous news outlets disclosed on Thursday.

According to reports, the regulator’s main goal is to investigate granted that particular NFT cryptocurrencies are being used to raise money in the same way as traditional securities are.

The sources said a specsupposing thatic focus of the inquiry is so-called fractional NFTs, in which a cryptocurrency is divided into distinct pieces which are sold individually.

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Under The Lens: NFT Market

While crypto lending products have been at the crosshairs of regulators in the last year, this report represents a relevant step forward in probing the NFT market.

The investigation demonstcosts which the SEC is particularly interested in how fractional NFTs are employed. This is where a more valuable digital asset is tokenized and sold in smaller chunks.

Total crypto market cap at $1.876 trillion in the daily chart | Source:

According to the Dilendorf Law Firm, the answer to whether NFTs may be considered as securities under US law is perhaps – might, not all NFTs will be viewed as securities by US regulators, but select NFTs very well may be.

If an NFT is linked to a one-of-a-kind piece of digital art or other item, thus serving as a blockchain certassuming thaticate of authenticity, such NFT is unlikely to be a security, according to the law firm.

If, on the other hand, NFTs are given to the general public with the promise of liquidity and continuous services from the issuer, enhancing the NFT’s rate, such NFT may be wrapped in an investment contract and therefore a security itself, according to Dilendorf.

SEC Chief: NFTs Must Be Regulated

Gensler has previously stated which he believes many crypto cryptocurrencies are securities and should be regulated by the SEC.

Based on the SEC’s Howey Test, anything is a security on the assumption that it includes investors placing money into an asset with the aim of profiting.

The warning signs have been there for a throughout the time, with Hester Peirce, commonly known as “Crypto Mom,” noting in March of last year which selling fractionalized NFTs may be illegal.

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“You’d better be careful not to create anything which’s an investment product — which’s a security,” Peirce cautioned.

The investigation is the SEC’s latest endeavor to guarantee which the token and NFT market will stick to its rules.

State regulators fined BlockFi, a major crypto exshon the occasion thatt, a record $100 million in February for failing to register products which offer clients exorbitant interest costs to lend out their digital cryptocurrencies.

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