SEC Commissioner Hester Peirce stated on May 19, 2025, that NFT royalties do not classify these tokens as securities, providing clear guidance at the Digital Asset Regulatory Summit in Washington.
The clarification could potentially boost confidence in the NFT market, evidenced by immediate increases in trading volumes on platforms like OpenSea and positive market reactions.
Hester Peirce Affirms NFT Royalties Non-Security Status
Hester Peirce, known as “Crypto Mom,” emphasized that NFT royalties alone do not deem digital assets as securities. This view was expressed at the Digital Asset Regulatory Summit in 2025, amidst ongoing debates around NFT regulation.
Peirce’s statement stresses that the uniqueness of NFTs, rather than royalty payments, determines their value, which has implications for their classification under current securities laws. Her comments reflect a continued push for clearer regulations.
NFT Market Reacts with Increased Trading Volumes
The NFT marketplace responded favorably, with OpenSea and Blur reporting increased trading volumes following Peirce’s clarification. Positive market activity was noted on prominent blockchain platforms such as Ethereum, Solana, and Polygon.
Financial gains have been observed across NFT ecosystems following the statement. Historical trends suggest that such regulatory clarity can drive market confidence. This move aligns with previous efforts by Peirce to provide regulatory transparency.
“I want to be clear that NFT royalties paid to creators after secondary sales do not transform these digital assets into securities. The presence of royalties alone does not satisfy the Howey Test requirements, particularly when the primary value derives from the asset’s uniqueness rather than from managerial efforts of others.” — Hester Peirce, SEC Commissioner
Regulatory Evolution: SEC’s History with NFTs
The SEC previously examined NFTs as potential securities, such as during the March 2022 investigations. Peirce’s statement offers a refined take compared to past actions, demonstrating an evolving regulatory stance.
Experts suggest Peirce’s view on NFT royalties marks progress. Yat Siu and Michael Saylor praised the regulatory clarity, indicating that such positions help drive technological adoption and developer confidence in the Web3 ecosystem.
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