NFT Regulation 2025: After the SEC Enforcement Retreat

By Chanté Eliaszadeh | December 18, 2025

In February and March 2025, the Securities and Exchange Commission did something unprecedented in the NFT space: it closed high-profile investigations into OpenSea and Yuga Labs without recommending enforcement action. After years of aggressive enforcement that sent shockwaves through the NFT community, the SEC's retreat marks a fundamental shift in regulatory approach.

For NFT creators, marketplace operators, and collectors who've spent three years wondering whether their digital assets constitute unregistered securities, this represents the most significant regulatory development since the SEC brought its first NFT enforcement action against Impact Theory in August 2023. The cases that weren't filed tell us as much about regulatory boundaries as the cases that were settled.

But this isn't deregulation—it's strategic repositioning. Understanding which NFT projects remain at risk requires analyzing what the SEC learned from its enforcement wins and losses, how the new administration is reshaping digital asset policy, and where the regulatory lines are being drawn going forward.

The October 2024 - March 2025 Enforcement Retreat: What Changed

The SEC's NFT enforcement retreat wasn't a single announcement but a series of case closures revealing a dramatic policy shift:

February 21, 2025: OpenSea, the largest NFT marketplace by historical volume, announced the SEC closed its investigation without recommending enforcement action¹. The SEC had issued a Wells Notice in August 2024, alleging OpenSea operated as an unregistered securities broker by facilitating NFT trades the SEC considered securities transactions. OpenSea had prepared a $5 million creator defense fund anticipating litigation.

March 3, 2025: Yuga Labs, creator of the Bored Ape Yacht Club (BAYC) NFT collection, announced the SEC concluded its three-year investigation without charges². The probe, launched in October 2022, examined whether BAYC NFTs and the associated ApeCoin (APE) token constituted unregistered securities offerings. BAYC floor prices jumped 3.8% on the news.

These closures came amid broader crypto enforcement withdrawals under the Trump administration's new SEC leadership. Acting Chair Mark Uyeda and Commissioner Hester Peirce—who dissented from the Impact Theory and Stoner Cats enforcement actions—now shape policy through the newly established Crypto Task Force³.

The retreat doesn't erase prior enforcement actions. Impact Theory paid $6.1 million to settle SEC charges in August 2023, and Stoner Cats paid $1 million in September 2023. Those settlements remain precedent. What changed is the SEC's appetite for pursuing marginal cases where courts might reject its securities theories.

Background: The SEC's NFT Enforcement Campaign (2022-2024)

To understand the significance of the retreat, you need context on what the SEC was attempting—and why it failed.

The Impact Theory Settlement (August 2023)

The SEC's first NFT enforcement action targeted Impact Theory, a Los Angeles media company that raised approximately $30 million by selling three tiers of NFTs called "Founder's Keys" (Legendary, Heroic, and Relentless) from October to December 2021⁴.

SEC's Theory: The Founder's Keys were investment contracts under the Howey test because:

• Purchasers invested money expecting profits
• Impact Theory promised to use funds to create content that would increase NFT value
• Value depended on Impact Theory's efforts (content development, marketing, community building)
• The company structured 2.5% royalties on secondary sales, incentivizing trading

Settlement Terms:

• $6.1 million payment ($5.6 million disgorgement plus $500,000 penalty)
• Destruction of remaining NFTs in Impact Theory's possession
• Modification of smart contract code to eliminate future royalty payments
• No admission of wrongdoing

Key Lesson: NFTs marketed as investments in a media company's future success, with promised value appreciation from the issuer's efforts, are securities.

The Stoner Cats Settlement (September 2023)

Two weeks after Impact Theory, the SEC charged Stoner Cats 2 LLC—a web series backed by actress Mila Kunis—with conducting an unregistered NFT offering⁵.

SEC's Theory: Similar to Impact Theory, Stoner Cats NFTs were securities because:

• Marketing emphasized access to exclusive content and community
• Buyers expected NFT value to increase as the show gained popularity
• Stoner Cats controlled content development (efforts of others)
• 2.5% secondary market royalties created profit incentive

Settlement Terms:

• $1 million civil penalty
• Commitment to help SEC distribute the penalty to NFT purchasers
• Destruction of remaining Stoner Cats NFTs
• Publication of settlement on social media channels

Dissenting Opinion: SEC Commissioners Hester Peirce and Mark Uyeda dissented, arguing that applying the Howey test to NFTs "creates a world of confusion for content creators"⁶. Their dissent foreshadowed the 2025 policy reversal.

Why These Cases Succeeded (Legally)

Both Impact Theory and Stoner Cats checked every Howey factor:

1. Investment of money ✓ (NFTs sold for ETH)
2. Common enterprise ✓ (pooled funds for content development)
3. Expectation of profits ✓ (explicit marketing about value appreciation)
4. From efforts of others ✓ (company controlled content production and marketing)

The settlements provided clarity: if you're selling NFTs to fund a business venture and marketing them as investments that will appreciate based on your company's efforts, you're selling securities. Period.

What Changed in 2025: The Enforcement Calculus Shifted

So why did the SEC close investigations into OpenSea and Yuga Labs after winning settlements in structurally similar cases?

1. Judicial Skepticism of Secondary Market Theory

The SEC's theory against OpenSea—that marketplace facilitators are securities brokers when they enable trading of NFTs that were initially sold as securities—faced increasing judicial resistance.

In the broader crypto enforcement campaign, courts questioned whether tokens that were securities at issuance remain securities indefinitely in secondary trading. The Southern District of New York raised concerns about applying investment contract analysis to transactions divorced from the original offering context⁷.

Rather than risk an adverse ruling that would undermine its authority, the SEC withdrew. This is classic regulatory litigation strategy: dismiss cases you might lose before courts establish adverse precedent.

2. Decentralization and "Sufficient Decentralization"

Yuga Labs presented a harder case than Impact Theory or Stoner Cats. By the time the SEC's investigation matured:

• BAYC had become a globally recognized brand (not dependent on Yuga Labs' efforts)
• Ownership was distributed across thousands of holders
• Value derived from community status and brand recognition, not Yuga Labs' roadmap execution
• ApeCoin governance had transitioned to the ApeCoin DAO

The SEC's closure suggests implicit recognition of the "sufficient decentralization" standard former Director William Hinman articulated in his 2018 speech: once a network or project is sufficiently decentralized, the Howey test's "efforts of others" prong weakens⁸.

3. Political and Leadership Changes

The Trump administration appointed Acting Chair Mark Uyeda, who explicitly dissented from the SEC's NFT enforcement strategy. The Crypto Task Force, led by Commissioner Hester Peirce, signaled openness to carving out NFTs from securities regulation through exemptive relief or interpretive guidance⁹.

In March 2025, Commissioner Peirce stated: "I think we'll see that we could do it on NFTs, as well. We could have done that a long time ago." She clarified that truly unique art NFTs would likely be exempt, though "tokenized securities" structured as NFTs would remain regulated¹⁰.

4. Resource Allocation and Priorities

The SEC's Enforcement Division has limited resources. Pursuing NFT cases against decentralized projects with ambiguous securities status diverts resources from clear fraud cases. With high-profile crypto fraud prosecutions ongoing (FTX, Celsius, Genesis), the SEC is prioritizing obvious misconduct over marginal securities theories.

The Howey Test Applied to NFTs: Drawing the Line

The retreat doesn't mean NFTs are unregulated. It clarifies where lines exist.

When NFTs Are Securities (High Risk)

Investment NFTs with these characteristics remain securities:

Example (Impact Theory Model): "Buy our Founder's Key NFT to support our media company. As we create hit shows, your NFT will increase in value. You'll also get exclusive access to future content and community events tied to our success."

Result: This is a security. You're investing in Impact Theory's business with expectation of profit from their efforts.

When NFTs Are NOT Securities (Lower Risk)

Collectibles and utility NFTs with these characteristics are likely NOT securities:

Example (Bored Ape Yacht Club Model): "Buy this unique digital artwork from our limited collection of 10,000 pieces. Join our community of holders. Each Ape is one-of-a-kind and serves as your membership to exclusive events."

Result: This is likely NOT a security (as evidenced by the Yuga Labs investigation closure). Value comes from scarcity, community status, and artistic merit—not Yuga Labs' ongoing efforts.

The Critical Distinction: Consumptive vs. Investment Intent

Courts are increasingly focusing on why purchasers buy NFTs, not just what issuers promise.

The NBA Top Shot case (Dapper Labs) raised the "consumptive utility" question: if purchasers buy NFTs for the experience—collecting, displaying, using in games—rather than as investments, does Howey still apply¹¹?

This creates a practical framework:

Art/Collectible NFTs: Lower risk when marketed for aesthetic appreciation, cultural significance, or community membership.

Utility NFTs: Lower risk when they provide immediate, functional value (game items, event access, software licenses) that exists regardless of issuer's future efforts.

Fractionalized NFTs: HIGH RISK. EU MiCA regulation treats fractionalized NFTs as fungible tokens subject to securities-like regulation¹². US regulators likely agree.

Membership/Access NFTs: MEDIUM RISK. If membership value depends on issuer's ongoing efforts to create experiences, events, or content, securities risk increases. If membership is primarily social/community-based, risk decreases.

Utility NFTs vs. Investment NFTs: Safe Harbor Analysis

Let's apply this framework to common NFT categories:

Profile Picture (PFP) Collections

Low Risk Examples:

• Fixed-supply art collections (10,000 pieces) with no ongoing development
• Community-focused with minimal issuer involvement post-mint
• Value from scarcity, social signaling, and artistic merit
• Examples: CryptoPunks (post-launch), Bored Apes (current state)

High Risk Examples:

• PFP collections marketed as investments in the creator's brand-building
• Explicit roadmaps promising value appreciation from issuer's marketing efforts
• Revenue sharing or profit participation features
• Examples: Collections promising "metaverse integration," "brand licensing deals," or "exclusive profit opportunities"

Gaming NFTs

Low Risk Examples:

• In-game items providing immediate gameplay utility
• Value tied to gameplay functionality, not game developer's future efforts
• Tradeable on secondary markets but used primarily for playing
• Examples: Axie Infinity assets (when used for gameplay), Gods Unchained cards

High Risk Examples:

• "Play-to-earn" models where NFTs are explicitly marketed as income-generating investments
• NFT sales funding game development with promised value appreciation as game improves
• NFTs marketed as profit-sharing mechanisms in game economy
• Examples: Games that market NFTs as "investments in our game's success"

Membership/Access NFTs

Low Risk Examples:

• Event tickets providing access to specific performances/conferences
• Lifetime membership to existing clubs, facilities, or services
• Access rights that don't depend on issuer's ongoing efforts to create value
• Examples: Concert NFT tickets, gym membership NFTs (if gym already operational)

High Risk Examples:

• Membership NFTs to clubs or experiences that don't yet exist
• Access to "future benefits" dependent on issuer's development efforts
• Membership with profit participation or revenue sharing
• Examples: "Buy this NFT to access our future restaurant/club/resort" (Impact Theory model)

Art NFTs

Low Risk Examples:

• Digital artwork sold for aesthetic appreciation
• Limited editions by recognized artists
• Marketing emphasizes artistic merit, not investment potential
• No ongoing royalties or revenue sharing
• Examples: Beeple one-off pieces, generative art from established artists

High Risk Examples:

• Art NFTs marketed as investments with expected appreciation
• Art tied to an artist's brand-building roadmap with explicit profit expectations
• Pooled funds used to promote the artist, increasing NFT values
• Examples: "Invest in my art career by buying these NFTs; as I become famous, they'll appreciate"

Marketplace Compliance Requirements

OpenSea's investigation closure doesn't mean marketplaces are in the clear—it means the SEC is refining its approach.

Current Marketplace Landscape (2025)

Major NFT Marketplaces:

Compliance Best Practices for Marketplaces

1. Know Your NFT (KYN) Policies

Marketplaces should implement screening to identify high-risk securities-like NFTs:

• Review marketing materials for investment language
• Flag collections with profit-sharing or revenue distribution
• Monitor for explicit investment promises or roadmap-dependent value
• Consider restricting clearly investment-oriented NFTs

2. Clear User Disclaimers

• "NFTs on this platform may have varying legal classifications"
• "We do not verify that NFTs are not securities"
• "Users are responsible for understanding legal status of NFTs they buy/sell"
• "This platform does not provide investment advice"

3. Avoid Broker-Dealer Activities

The SEC's OpenSea theory rested on broker-dealer registration requirements. Marketplaces should:

• Operate as technology platforms, not intermediaries
• Avoid custody of user assets (non-custodial wallets only)
• Don't provide investment advice or recommendations
• Don't selectively promote NFTs based on investment potential

4. Creator Royalty Policies

High secondary royalties (>5%) suggest issuers have profit incentives to drive trading, supporting securities classification. Marketplaces can:

• Cap royalty percentages (2.5% standard emerging)
• Require transparency in royalty structures
• Allow users to opt out of royalty payments (controversial but increasingly common)

5. Jurisdictional Limitations

• Geofence US users if offering high-risk NFTs
• Implement IP blocking for sanctioned jurisdictions
• Comply with state money transmitter laws where applicable
• Monitor OFAC sanctions lists

Creator Responsibilities: Structuring Compliant NFT Projects

If you're launching an NFT project in 2025, here's how to minimize securities risk:

Step 1: Marketing Audit (Most Critical)

Prohibited Language:

• "Investment," "ROI," "profit," "returns," "appreciation"
• "Our success will make these more valuable"
• "Early investors will benefit"
• "Funding our business through this sale"

Acceptable Language:

• "Collectible digital art"
• "Membership to our community"
• "Access to [specific utility]"
• "Limited edition, unique pieces"
• "Support our artistic/creative work"

Action: Review ALL marketing materials—website, Discord, Twitter, whitepaper—and eliminate investment-focused language.

Step 2: Utility vs. Speculation

Design NFTs with immediate, non-speculative utility:

• Art: Focus on aesthetic value, not price appreciation
• Gaming: Emphasize gameplay functionality, not asset values
• Membership: Deliver community access immediately, not "future benefits"
• Access: Provide specific, existing experiences—not promises

Red Flag: If your NFT's value depends entirely on what you'll build in the future, it's likely a security.

Step 3: Roadmap Management

Low-Risk Approach:

• Complete core functionality BEFORE minting
• Treat post-mint developments as "surprises" or "community initiatives," not promises
• Don't tie NFT value to your execution of a roadmap
• Position ongoing work as artist/creator freedom, not contractual obligations

High-Risk Approach:

• Publish detailed roadmaps with phases tied to NFT value
• Market NFTs as "investments in our vision"
• Promise specific deliverables that will increase NFT values

Step 4: Tokenomics and Royalties

Royalty Best Practices:

• Keep secondary royalties at 2.5% or lower
• Don't market royalties as your business model
• Consider zero royalties for maximum regulatory safety
• Avoid profit-sharing or revenue distribution mechanisms

High-Risk Features:

• Staking rewards paid from issuer treasury (looks like dividends)
• Profit participation from your business revenues
• Buyback programs or floor price guarantees
• Fractionalization (creates fungible securities)

Step 5: Decentralization Planning

From Day One:

• Distribute NFTs broadly (avoid concentrated holdings)
• Build community ownership of direction
• Transition governance to holders when feasible
• Reduce issuer's ongoing efforts as value driver

Goal: If you disappeared, would the NFTs retain value based on community, scarcity, and cultural significance? If yes, you're in safer territory.

NFT Launch Compliance Checklist

• Marketing materials reviewed for investment language (none present)
• Whitepaper emphasizes utility/art, not investment returns
• Roadmap (if any) positioned as aspirational, not value-driver
• NFTs provide immediate utility or aesthetic value at mint
• No profit-sharing, revenue distribution, or dividend-like features
• Secondary royalties ≤ 2.5% (or zero)
• No fractionalization of NFTs
• Legal counsel reviewed structure for securities issues
• Terms of service include "not an investment" disclaimers
• Community guidelines prohibit investment-focused speculation
• Team has plan for decentralization over time

State Law Considerations Beyond Securities

Even if your NFT isn't a federal security, state laws may apply:

1. Gambling and Sweepstakes Laws

Issue: NFTs with randomized traits or "loot box" mechanics may constitute gambling in some states.

Compliance:

• Ensure "no purchase necessary" alternative entry methods
• Don't market random traits as "winning" or "jackpots"
• Avoid explicit odds-based marketing (e.g., "1% chance of rare trait")
• Consult gaming law counsel for play-to-earn mechanics

High-Risk States: Nevada, New Jersey, Pennsylvania (strict gambling laws)

2. Consumer Protection Laws

Issue: False advertising, deceptive practices, or failure to deliver promised utility.

Compliance:

• Deliver on explicit promises (don't overpromise)
• Provide clear refund policies if NFT utility fails
• Respond to consumer complaints promptly
• Avoid "rug pull" scenarios where you disappear post-mint

Enforcement: State attorneys general increasingly active in crypto/NFT consumer protection.

3. Intellectual Property Licensing

Issue: NFT purchasers often misunderstand IP rights they're buying.

Compliance:

• Clearly state what IP rights transfer with NFT (if any)
• Separate artwork ownership from commercial use rights
• Use standardized licenses (e.g., CC0, limited commercial use)
• Address derivative works and brand usage

Common Misunderstanding: "I own the NFT" ≠ "I own the copyright." Be explicit.

4. Money Transmitter Licensing

Issue: Platforms that hold customer funds or facilitate fiat-to-NFT transactions may need state money transmitter licenses.

Compliance:

• Use non-custodial models where possible
• Don't hold user funds
• Partner with licensed payment processors for fiat
• Consult money transmitter counsel for marketplace platforms

Related Reading: Money Transmitter Licensing Guide

International NFT Regulations

European Union: MiCA Regulation

The EU's Markets in Crypto-Assets (MiCA) regulation became fully effective December 30, 2024¹³.

NFT Treatment:

• Unique NFTs: Exempt from MiCA (not considered crypto-assets)
• Large collections: May be considered fungible if issued in large series
• Fractionalized NFTs: Explicitly covered as crypto-assets
• "Utility" exception: NFTs providing genuine utility (not investment) likely exempt

Key Principle: Simply adding a unique identifier isn't enough—true uniqueness and non-fungibility required.

Future Regulation: European Commission tasked with comprehensive NFT assessment and potential legislative proposal by 2026.

United Kingdom

Current Status: No specific NFT regulation; case-by-case analysis under existing securities and financial promotion rules.

Approach: Wait-and-see, learning from EU's MiCA implementation.

Recommendation: UK NFT projects should consult UK legal counsel on Financial Conduct Authority (FCA) jurisdiction.

Key Takeaway for US Projects

If operating internationally:

• EU presence requires MiCA analysis (especially for collections/fractionalized NFTs)
• UK requires FCA financial promotion compliance
• Asia-Pacific jurisdictions vary widely (Singapore progressive, China restrictive)
• Geofencing may be necessary for high-risk NFT models

Best Practices for NFT Projects Going Forward

Based on the enforcement retreat and settlements, here's your strategic roadmap:

For New NFT Projects (Pre-Launch)

1. Structure as Art/Collectible First

• Lead with artistic merit, cultural value, or community membership
• Relegate any utility to secondary benefits
• Never lead with investment potential

2. Complete Before You Mint

• Deliver core functionality at launch
• Don't sell NFTs to fund development
• Post-launch work is bonus, not obligation

3. Decentralize Early

• Broad distribution from day one
• Community governance where feasible
• Reduce team's role as value driver over time

4. Conservative Tokenomics

• Low/zero royalties
• No profit-sharing or revenue distribution
• Avoid staking rewards from issuer treasury

5. Legal Review

• Securities law analysis before launch
• Marketing materials compliance review
• Terms of service with proper disclaimers
• Ongoing monitoring of regulatory developments

For Existing NFT Projects (Post-Launch)

If You Have Securities Risk Factors:

1. Cease Investment Marketing

• Remove roadmap promises tied to value
• Stop emphasizing "holders will profit from our work"
• Reframe communications around community/culture

2. Reduce Ongoing Obligations

• Complete promised roadmap items or pivot to "community-led"
• Transfer governance to DAO if feasible
• Minimize team's role in value creation

3. Modify Royalty Structures

• Reduce secondary royalties to 2.5% or lower
• Consider eliminating royalties entirely
• Update smart contracts if possible

4. Consider Registration or Exemption

• Consult securities counsel about Reg D, Reg A+, or Reg CF
• Explore exemptive relief if SEC offers NFT safe harbor
• Evaluate cost-benefit of compliance vs. restructuring

5. Monitor Task Force Guidance

• SEC Crypto Task Force developing NFT frameworks (expected Q3-Q4 2025)
• Commissioner Peirce suggested exemptive relief possible¹⁴
• Position for compliance when rules clarify

For NFT Marketplaces

1. Implement Risk-Based Screening

• Flag collections with clear investment language
• Require creator representations about securities status
• Consider restricting highest-risk NFTs

2. Enhance User Disclosures

• "We don't verify legal status of NFTs"
• "Some NFTs may be securities"
• "Consult legal/tax advisors"

3. Stay Non-Custodial

• Don't hold user funds or assets
• Facilitate peer-to-peer transactions only
• Avoid broker-dealer activities

4. Monitor Regulatory Developments

• Track SEC guidance on marketplace regulation
• Engage with Crypto Task Force comment processes
• Join industry associations for coordinated advocacy

5. Build Compliance Infrastructure

• KYC/AML for high-value transactions
• OFAC sanctions screening
• Transaction monitoring for suspicious activity
• Legal counsel on retainer

Looking Ahead: The Regulatory Roadmap for NFTs

Based on SEC statements and Task Force priorities, here's what to expect:

Q3-Q4 2025: Task Force Guidance

• Clarified factors for NFT securities analysis
• Potential exemptive relief for art/collectible NFTs
• Safe harbor for "truly decentralized" NFTs
• Marketplace registration guidance

2026: Compliance Deadlines

• Registration or exemption requirements take effect
• Marketplace licensing or registration requirements
• Enforcement ramp-up under clearer rules

Ongoing: State-Level Activity

• State securities regulators coordinating NFT oversight
• Consumer protection enforcement continues
• Money transmitter licensing for NFT platforms

International Harmonization:

• EU MiCA comprehensive review (2026)
• Potential US-EU coordination on NFT frameworks
• UK likely follows EU lead with modifications

The Bottom Line

The SEC's enforcement retreat isn't capitulation—it's recalibration. The agency learned that:

1. Courts are skeptical of secondary market securities theories
2. Decentralized projects don't fit traditional Howey analysis
3. Art/collectible NFTs deserve different treatment than investment contracts
4. Resources are better spent on clear fraud than marginal cases

But the core principle remains: if you're selling NFTs as investments in your future efforts, you're selling securities. That hasn't changed. What's changed is the SEC's willingness to pursue ambiguous cases.

For NFT creators and marketplaces, the path forward is clear:

• Structure NFTs as art, collectibles, or functional utility—not investments
• Eliminate investment marketing and promises of value appreciation
• Build decentralized communities where value comes from culture, not your efforts
• Stay under 2.5% royalties and avoid profit-sharing features
• Monitor Task Force guidance and position for compliance

The NFT market revival opportunity is real. Projects that embrace these principles will thrive in the new regulatory environment. Those that ignore the lessons of Impact Theory and Stoner Cats do so at their own peril.

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Navigating NFT Securities Compliance

Astraea Counsel advises NFT creators, platforms, and marketplaces on securities law compliance, project structuring, and regulatory strategy. Former SEC experience provides unique insight into enforcement priorities and defensible structures.

Need NFT legal guidance? Contact us to discuss your project.

Related Resources

• SEC Crypto Enforcement Defense - Responding to Wells Notices and SEC investigations
• Token Launch Legal Checklist - Comprehensive securities compliance for token offerings
• The SEC's Crypto Pivot - Understanding the broader regulatory shift
• Digital Assets & Blockchain Practice - Full-service legal counsel for crypto companies

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Disclaimer: This article provides general information for educational purposes only and does not constitute legal advice. NFT regulation is evolving rapidly, and securities analysis is highly fact-specific. Consult qualified legal counsel for advice on your specific NFT project or marketplace.

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Footnotes

1. OpenSea, "Updating the community on the SEC" (Feb. 21, 2025), available at https://opensea.io/blog/articles/updating-the-community-on-the-sec. OpenSea announced the SEC informed the company it was closing its investigation and did not intend to recommend enforcement action. ↩

2. Yuga Labs, Statement on X/Twitter (Mar. 3, 2025), available at https://twitter.com/yugalabs. "After 3+ years, the SEC has officially closed its investigation into Yuga Labs. This is a huge win for NFTs and all creators pushing our ecosystem forward." ↩

3. SEC, Crypto Task Force announcement (Feb. 2025). The Task Force, led by Commissioners Hester Peirce and Mark Uyeda, is charged with developing "clear and workable regulatory guidelines" for digital assets. ↩

4. SEC, "SEC Charges LA-Based Media and Entertainment Co. Impact Theory for Unregistered Offering of NFTs," Press Release 2023-163 (Aug. 28, 2023), available at https://www.sec.gov/news/press-release/2023-163. Impact Theory settled charges for $6.1 million ($5.6 million disgorgement plus $500,000 penalty). ↩

5. SEC, "SEC Charges NFT Marketplace Operator for Unregistered Offering," Press Release 2023-178 (Sept. 13, 2023), available at https://www.sec.gov/news/press-release/2023-178. Stoner Cats 2 LLC agreed to pay $1 million penalty and destroy remaining NFTs. ↩

6. SEC Commissioners Hester M. Peirce and Mark T. Uyeda, "NFTs & the SEC: Statement on Impact Theory, LLC" (Aug. 28, 2023), available at https://www.sec.gov/news/statement/peirce-uyeda-statement-nft-082823. "Today's settlement creates a world of confusion for NFT creators." ↩

7. SEC v. Coinbase, Inc., No. 23-cv-4738 (S.D.N.Y. filed June 6, 2023). The court's December 2024 order questioned whether tokens remain securities in secondary trading divorced from the original offering context, contributing to the SEC's dismissal decision. ↩

8. William Hinman, Director, SEC Division of Corporation Finance, "Digital Asset Transactions: When Howey Met Gary (Plastic)" (June 14, 2018), available at https://www.sec.gov/news/speech/speech-hinman-061418. Hinman articulated the "sufficient decentralization" concept: once a network is sufficiently decentralized, the Howey test's "efforts of others" prong may no longer apply. ↩

9. SEC Commissioner Hester M. Peirce, Remarks at SEC Crypto Roundtable (Mar. 21, 2025). Peirce stated the Task Force could "make an announcement of an exemptive nature regarding NFTs" and suggested art NFTs might be excluded from securities classification. ↩

10. SEC Commissioner Hester M. Peirce, "Bees, Ts, and NFTs: Remarks at the Coin Center Dinner" (Sept. 25, 2025), available at https://www.sec.gov/newsroom/speeches-statements/peirce-remarks-coin-center-dinner-092525. Peirce used hypothetical NFT characters to illustrate stakeholders in crypto policy debates. ↩

11. Friel v. Dapper Labs, Inc., No. 21-cv-5837 (S.D.N.Y.). The court allowed securities claims to proceed against Dapper Labs (NBA Top Shot), noting marketing materials with "rocket ships and stock market 'up' emojis" created profit expectations. The case raises the "consumptive utility" question: whether NFTs purchased for experience rather than investment constitute securities. ↩

12. European Union, Regulation (EU) 2023/1114 on Markets in Crypto-Assets (MiCA), Art. 4 (effective Dec. 30, 2024), available at https://eur-lex.europa.eu. MiCA exempts unique NFTs but covers fractionalized NFTs and large collections that create fungibility. ↩

13. European Commission, "Questions and Answers: Regulation on Markets in Crypto-Assets (MiCA)" (Dec. 2024), available at https://finance.ec.europa.eu. MiCA exempts genuinely unique, non-fungible crypto-assets but applies to fractional NFTs and collections creating fungibility. ↩

14. SEC Commissioner Hester M. Peirce, Interview at SEC Crypto Roundtable (Mar. 21, 2025). Peirce stated: "I think we'll see that we could do it on NFTs, as well. We could have done that a long time ago," suggesting exemptive relief or safe harbor guidance forthcoming. ↩