Unchained Why the SEC Is Probing Yuga Labs and Coin Center �Is Suing Treasury - Ep. 407
Oct 14, 2022
Peter Van Valkenburgh, Director of Research at Coin Center and an expert in cryptocurrency regulation, discusses the SEC's investigation into Yuga Labs and the complexities of determining whether NFTs are securities. He reveals the implications for NFT holders if classified as such and shares insights on Coin Center's lawsuit against the U.S. Treasury regarding Tornado Cash sanctions. Peter also addresses the broader legal challenges posed by smart contracts and the need for effective regulation in the evolving crypto landscape.
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NFT Securities Risk
- NFTs are often viewed as less susceptible to securities laws than fungible tokens.
- However, their non-fungibility doesn't guarantee exemption, especially when value is tied to the project's overall success.
Metaverse Land as Securities
- The Howey Test, stemming from a case involving orange groves, applies to metaverse land sales.
- Promises of future value and reliance on developers, not personal effort, can make them securities.
Consequences of NFT Securities Classification
- Issuers of NFTs deemed securities face penalties for unregistered offerings.
- Purchasers, considered victims, might have legal claims against issuers for lack of disclosure.
