- The entire NFT market had its lowest weekly transaction volume in the preceding 2 years.
- The firm’s unregistered sale of NFTs violated the Securities Act of 1933 as per SEC.
The number of people involved in NFT trading has dropped to a level not seen in last two years. In April of 2022, the NFT market had $480,738,395 in volume. However, the weekly volume has decreased to a meagre $10,054,152 as of the end of August 2023.
Moreover, in recent weeks there were about 50,000 people actively involved in NFT trading, which may be indicative of a larger trend of waning interest in the NFT market. Also, the entire NFT market had its lowest weekly transaction volume in the preceding two years, at only $73.2 million. For a long time now, the NFT market has been underperforming with prominent NFT collections witnessing record low floor prices.
Now the recent action by the U.S SEC has only made things worse for the already struggling sector. After selling NFTs to investors between October and December 2021, a media and entertainment firm has been accused by the U.S SEC of engaging in unregistered securities transactions. Nearly $30 million was reportedly obtained by Los Angeles-based content creator Impact Theory via the selling of NFTs dubbed Founder’s Keys, which were sold in three levels.
Moreover, the corporation allegedly told prospective investors that buying a Founder’s Key was like buying a piece of the company, as per the SEC. Also, according to the Securities and Exchange Commission, the firm’s unregistered sale of NFTs violated the Securities Act of 1933. Impact Theory has consented to a cease-and-desist injunction.
Without admitting or contesting the SEC’s allegations, the corporation was compelled to pay over $6.1 million in penalty. In addition, a fund will be established to reimburse those who purchased Founder’s Key NFTs.
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