Foley & Lardner LLP of counsel Andy Lee is quoted in the Bloomberg Law article, “SEC’s First Foray Into NFTs Stirs Fears of More Enforcement,” discussing the U.S. Securities and Exchange Commission’s growing regulatory scrutiny of non-fungible tokens (NFTs).
“I think what the SEC is trying to do is build out the guide rails of how the rules apply to NFTs by simply dropping enforcement actions, rather than going through customary regulatory procedures,” Lee explained. “I think you’re going to see more in the next couple months.”
Lee noted that regulators are watching how NFTs and other digital assets are promoted. The SEC views advertising the potential financial gain of the tokens as “marketing in a securities sense.”
From “a risk perspective, it’s very important stay away from the kind of language and focus instead on the utility of the NFT,” Lee added.