The SEC must clarify which NFTS is regulated, says the Commissioner

According to the Sec Commissioner Hester Peirce, the US supervisory authorities left the creators and investors of digital art in the dark about which could not be fungal tokens (NFTS).

In an interview with the Financial Times, the high-ranking Republican member of the US stock exchange inspectorate said that some NFTs could be regulated such as stocks or bonds. She asked the SEC to publish more information about the market, including the caricatures of Bored Ape.

nfts that contain “governance rights” or offer investors rights to sources of income could be recorded by US securities laws, said Peirce. Token that are split and then sold could also fall into this category.

Since small investors have hurried to buy digital creations from artists and other enthusiasts, "are NFTs a certain area in which we could give some guidelines," she said. "What would harm us to go out with something like that?"

PEIRCE, one of five SEC members, has often separated with the chairman Gary Gensler because of the regulation of cryptocurrencies.

Gensler has taken a hard attitude towards the cryptom market, which he called the "Wild West". He has asked platforms for digital assets to register with the regulatory authority and consider most tokens as securities.

The SEC chairman has opposed the elaboration of new rules for cryptoma markets and argues that the existing laws are sufficiently clear. In May, the SEC doubled the size of its enforcement team, which deals with cryptocurrencies, including NFTs.

"If an NFT was a security and someone has given incorrect information about it, then he has a problem with securities fraud," said Peirce.

Peirce joined the agency in 2018 after researching financial regulation at the Mercatus Center, a thought factory for the Free Market and worked as a second consultant.

Your comments come when Yuga Labs, the NFTS pioneer and creator of the well-known Bored Ape Yacht Club collection, are reported to be examined by the SEC. The company said that it was "known" that the regulatory authorities "wanted to learn more about online decentralization and blockchain", and added that it was "obliged to work on the way to unreserved cooperation with all inquiries". Peirce refused to report about the investigation.

nfTS that use blockchain technology to validate the possession and authenticity of digital works of art and objects gained popularity last year.

But the demands for more regulation came together with a break-in of the NFT market, where the trade volumes have collapsed since the beginning of the year. According to Tracker Dappradar, the average price of the Bored Ape Yacht Club NFTS has fallen by almost 20 percent in the past 30 days.

At the beginning of the year, Yuga was rated $ 5 billion by Andreessen Horowitz, which makes the start-up one of the most valuable NFT players.

Since the SEC under Gensler has presented a flood of proposed control changes since last year, Peirce has questioned the need for new regulations for private funds. In February, the SEC rules proposed that require an annual examination of private funds, prohibit certain fees that raise buyout shops and prohibit preferred conditions for certain investors.

Great, experienced investors usually did not need the same Seco supervision for funds as private investors, she said.

When asked whether the US regulatory authorities should play a role in reinforcing the supervision to avoid explosions that are similar to those of Archegos Capital Management-a private fund, whose payment failures in 2021 in Margin Calls losses of more than 10 billion. I think the supervisory authorities are more likely to come in retrospect, but risk managers really have to intervene beforehand. ”

Additional reporting by Tim Bradshaw in London