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- The overall NFT market experienced its lowest weekly transaction volume in the last two years.
- The company’s unregistered NFT sales breached the Securities Act of 1933 according to the SEC.
The number of participants in NFT trading has fallen to a level not observed in the past two years. In April 2022, the NFT market recorded a volume of $480,738,395. However, by the end of August 2023, the weekly volume had plummeted to a mere $10,054,152.
Additionally, recent weeks have seen approximately 50,000 individuals actively participating in NFT trading, which may suggest a broader trend of diminishing interest in the NFT sector. The entire NFT market also reached its lowest weekly transaction volume in the last two years, totaling only $73.2 million. The NFT market has been consistently underperforming, with notable NFT collections experiencing unprecedented low floor prices.
Struggle Continues
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The recent actions taken by the U.S. SEC have further exacerbated the challenges faced by this already struggling industry. Following the sale of NFTs to investors from October to December 2021, a media and entertainment company has been accused by the U.S. SEC of conducting unregistered securities transactions. Los Angeles-based content creator Impact Theory reportedly raised nearly $30 million through the sale of NFTs known as Founder’s Keys, which were offered in three tiers.
Furthermore, the company allegedly informed potential investors that acquiring a Founder’s Key was akin to purchasing a stake in the company, according to the SEC. The Securities and Exchange Commission also stated that the firm’s unregistered NFT sales violated the Securities Act of 1933. Impact Theory has agreed to a cease-and-desist order.
Without admitting or disputing the SEC’s claims, the company was required to pay over $6.1 million in fines. Additionally, a fund will be created to compensate those who purchased Founder’s Key NFTs.
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