Bankless Are NFTs Securities? with Securities Lawyer Brian Frye
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Jan 4, 2023 Brian Frye, a law professor at the University of Kentucky and securities expert, dives into the controversial classification of NFTs as securities. He argues that recognizing NFTs as securities could actually benefit the market by bringing regulatory clarity. Frye highlights the ongoing challenges of the SEC and the potential for NFTs to democratize access to capital for creators. He also discusses the evolving nature of copyright in the digital age, emphasizing how NFTs can reshape monetization opportunities for artists while addressing legal hurdles in the creative landscape.
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How the SEC Decides What to Regulate
- The question "Are NFTs securities?" is a flawed framing.
- The real question is whether the SEC believes it should regulate NFTs.
The SEC No-Action Letter NFT
- Brian Frye created and sold an NFT titled "SEC No Action Letter Request."
- This NFT project was a form of performance art trolling the SEC, highlighting the ambiguity of securities law.
Securities as a Tool for Investment
- Securities were invented as a tool to maximize the value of capital and facilitate productive investments.
- NFTs can be viewed as securities because they represent an investment in an artist's future clout.