{"id":353370,"date":"2024-09-23T07:03:48","date_gmt":"2024-09-23T01:33:48","guid":{"rendered":"https:\/\/dripp.zone\/news\/?p=353370"},"modified":"2024-09-23T07:03:48","modified_gmt":"2024-09-23T01:33:48","slug":"sec-commissioners-argue-securities-laws-are-unnecessary-in-flyfish-nft-case-crypto-news","status":"publish","type":"post","link":"https:\/\/dripp.zone\/news\/sec-commissioners-argue-securities-laws-are-unnecessary-in-flyfish-nft-case-crypto-news\/","title":{"rendered":"SEC commissioners argue securities laws are unnecessary in Flyfish NFT case – Crypto News"},"content":{"rendered":"
\n

SEC Commissioners Hester M. Peirce and Mark T. Uyeda criticized<\/a> the regulator\u2019s enforcement action against the Flyfish Club non-fungible token (NFT) collection.<\/p>\n

In a Sept. 16 letter, the commissioners argued that securities laws are not applicable in this case.<\/p>\n

Flyfish Club, a dining establishment, sold NFT as exclusive access to a future restaurant and bar. The club created about 3,000 NFTs, selling over half at $8,400 for regular NFTs and $14,300 for Omakase NFTs, raising $14.8 million. It also earned $2.7 million in secondary sale royalties.<\/p>\n

As a result, the SEC charged<\/a> Flyfish Club with conducting an unregistered offering of crypto asset securities in the form of NFTs, settling the case with a $750,000 civil penalty and a commitment to comply with a cease-and-desist order.<\/p>\n

The commissioners stated:<\/p>\n

\n

\u201cBy its very nature, Omakase dining requires a deep level of trust. Americans should be able to extend a similar trust to our regulators. Today\u2019s settled enforcement action with Flyfish Club for its sale of non-fungible tokens (\u201cNFTs\u201d) is just the latest dish that undermines trust in Chef SEC. Accordingly, we dissent.\u201d<\/p>\n<\/blockquote>\n

Additionally, Peirce and Uyeda argued that these NFTs are utility tokens, not securities.<\/p>\n

They emphasized that the Howey Test, used to check if an asset is a security, is inapt for Flyfish NFTs since their holders had reasonable expectations of obtaining in the future \u201cwonderful culinary experiences\u201d and other exclusive membership experiences related to Flyfish.<\/p>\n

The commissioners warned that applying securities laws in this case could harm both the present case and future precedents and called for the SEC to provide guidance to non-securities NFT creators, allowing for experimentation without legal uncertainty.<\/p>\n

SEC crackdown on NFTs<\/h2>\n

The SEC threatened<\/a> the NFT marketplace OpenSea with a Wells Notice on Aug. 28 for allegedly offering securities on its platform.<\/p>\n

This is an action by the US regulator that precedes an enforcement effort should the company comply and cease its operations deemed irregular.<\/p>\n

Devin Finzer, CEO of OpenSea, claimed<\/a> that the regulator\u2019s move affects creators and artists and declared that the company would \u201cstand up and fight.\u201d<\/p>\n

Following Finzer\u2019s remarks, the Coinbase-backed organization Stand With Crypto Alliance launched<\/a> the Creator Defense Fund, which is $6 million in size and aimed at protecting artists affected by the SEC enforcement act.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

SEC Commissioners Hester M. Peirce and Mark T. Uyeda criticized the regulator\u2019s enforcement action against the Flyfish Club non-fungible token (NFT) collection. In a Sept. 16 letter, the commissioners argued that securities laws are not applicable in this case. Flyfish Club, a dining establishment, sold NFT as exclusive access to a future restaurant and bar. […]<\/p>\n","protected":false},"author":2,"featured_media":353372,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[274,273,272,244,266,271,268,270,269,267],"class_list":["post-353370","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-de-fi","tag-crypto-finance","tag-decentralized-finance","tag-liquidity","tag-metamask","tag-pancake","tag-slippage","tag-sushiswap","tag-tronlink","tag-trust-wallet","tag-uniswap"],"_links":{"self":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/353370","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/comments?post=353370"}],"version-history":[{"count":1,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/353370\/revisions"}],"predecessor-version":[{"id":353373,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/353370\/revisions\/353373"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media\/353372"}],"wp:attachment":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media?parent=353370"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/categories?post=353370"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/tags?post=353370"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}