[코인리더스] Beware of issuing’creative’ in the NFT craze… Cryptomom “Illegal when selling a part of the stake”

Recently, a tweet of’NFT’ (Non fungible Token) by Jack Dorsey, CEO of social media Twitter, was auctioned off for $2.9 million.

Also, earlier this month, American artist Biffle’s digital work was sold at auction for $69.3 million, setting a new selling price.

In the midst of the NFT craze around the world, Hester Pierce, known as CryptoMom as a cryptocurrency advocate by the US Securities and Exchange Commission (SEC), said, “Selling a portion of the stake by launching NFT or NFT basket products If you do, it can be illegal,” he pointed out.

According to Cointeledraf, a cryptocurrency specialist, Commissioner Hester Pierce said at Draper Goren Holm’s’Security Token Summit’ on the 25th (local time), “NFT or NFT index basket issuers are unconscious. “There is a possibility to sell investment products in the middle,” he worried.

He said, “The basic concept of NFT should be non-fungible (which means that it is generally less likely to be securities). Yes. If an NFT issuer launches an NFT or NFT basket product and sells its equity portion, it is treated as a securities product and can be applied to the securities law.”

In the meantime, he criticized the’Howey Test’, a criterion for testing whether an asset is securities or not, and pointed out that it “does not apply effectively.”

Meanwhile, Crypt, a cryptocurrency specialty media, cited the Coinmetrics report and reported that the number of ERC-721 smart contracts exceeded 19,000 due to the NFT boom, reaching a record high.

ERC-721 is an Ethereum token standard that generates NFTs. According to Dapp Radar, the volume of NFTs in the three major NFT marketplaces surged from $12 million in December 2020 to $342 million in February this year. The number of ERC-721 smart contracts still occupies only a small part of the total of 17.84 million smart contracts deployed on Ethereum, which shows great growth potential in the future.