The U.S. Securities and Exchange Commission (SEC) says it is investigating whether certain non-fungible tokens (NFTs) qualify as securities and should be regulated like stocks, according to several media reports.
Lawyers for the SEC have sent subpoenas to NFT creators and various crypto exchanges requesting more information. The probe is particularly focused on fractional NFTs, in which a token is broken down into many units that are sold separately in much the way that fractional shares of stocks are sold by many brokerages.
SEC head Gary Gensler has previously said that he believes many cryptocurrency tokens are likely securities that should fall under the purview of the SEC and be regulated in the same way as stocks.
Gensler has said repeatedly that the SEC is looking to increase the regulation of cryptocurrencies and digital assets.
The SEC’s “Howey Test” considers something a security if it involves investors putting money into an asset with the intention of making a profit from it. The agency is looking to apply that test to NFTs and cryptocurrencies.
