The US Securities and Exchange Commission has launched an investigation into non-fungible token (NFT) markets and creators for violating securities legislation, according to reports.
The SEC demanded information on certain NFTs in past months, particularly surrounding the use of fractional NFTs, according to Cointelegraph.
Fractional NFTs are when they are 'tokenised' into smaller pieces of several NFTs that are sold individually.
Anonymous sources told Bloomberg that the SEC is investigating whether “certain non-fungible tokens… are being utilised to raise money like traditional securities”.
This investigation followed on from the record US$100mln fine issued to crypto trading platform BlockFi for falsely labeling high-yield lending products as securities.
XRP, the crypto owned by Ripple Labs, has been involved in an ongoing 15-month legal case for selling “unregistered securities”.
NFTs have been growing in popularity over the past year, with US$10.7bn pumped into NFT exchanges OpenSea and LooksRare in the last 30 days alone, Cointelegraph said.