- Flyfish Fined $750K For Trading Unregistered NFTs
- Previous Legal Fights Between The SEC And NFT Projects
- Related NFT News
The United States Securities and Exchange Commission (SEC) continues to maintain a strict stance against unregistered securities in the NFT market. In yet another incident, the regulatory commission has fined Flyfish Club, a restaurant based in New York, nearly $1 million for offering unregistered NFT collections to US crypto investors.
Flyfish Fined $750K For Trading Unregistered NFTs
In a September 17th publication, the US SEC confirmed that it has settled with Flyfish Club, previously accused of selling illegal securities to US customers. As part of the settlement, Flyfish Club’s NFT project has agreed to pay $750,000. > NFT project Flyfish Club reached a settlement with the US SEC for unregistered issuance of crypto asset securities and paid a fine of $750K. Flyfish Club agreed to destroy all NFTs and no longer accept related royalties. The restaurant raised $14.8 million by selling 1,600 NFTs... — Wu Blockchain (@WuBlockchain), September 17, 2024. Flyfish is a curated members-only club and restaurant in New York, offering elevated dining and social experiences. This five-star restaurant is backed by several prominent investors, including Gary Vaynerchuk. The restaurant previously launched an NFT collection, giving members exclusive access to the restaurant and cocktail lounge, upscale restaurant, intimate omakase room, and an outdoor space. In its findings, the US SEC maintained that Flyfish Club offered unregistered crypto asset securities when it sold 1,600 NFTs to US investors, making $14.8 million. Flyfish Club anticipated using the raised funds from NFT selling to upgrade its facility. However, after close consideration, the regulatory commission insisted: >*SEC statement: “Flyfish Club led investors to expect profits from the entrepreneurial and managerial expertise of Flyfish and its principals in building and running the restaurant. Flyfish Club told investors they could potentially profit from reselling their NFTs at appreciated prices in the secondary market.”* The Flyfish Club has admitted or denied the accusations. In return, the club has agreed to pay $750,000 for the settlement. Moreover, the entity has agreed to destroy all Flyfish NFTs that are still under its control within the next 10 days and halt future royalties from the sales of these NFTs. Flyfish NFT collection featured a limited edition of 2,072 NFTs hosted on the Ethereum blockchain network.
Previous Legal Fights Between The SEC And NFT Projects
This is not the first time the US SEC has prosecuted unregistered NFT projects. Last year, the regulatory commission charged the Stoner Cats NFT project and its parent company with offering unregistered NFTs, raising over $8 million from US investors. In 2024, the commission recently issued a Wells notice to the OpenSea NFT marketplace, claiming that the majority of NFTs on its platform are unregistered securities. >OpenSea has received a Wells notice from the SEC threatening to sue us because they believe NFTs on our platform are securities. — Devin Finzer (@dfinzer.eth), August 28, 2024.
Related NFT News
* DeGods NFT Creator De Labs Launches A New Crypto Token $DeGods – Here’s More Details. * NFT Sales Soar 3% This Week, As NFT Buyers And Sellers Surge By Over 450%. * The Azuki NFT Creator Introduces An NFT Domain Anime.com – A New Way To Anime.
Conclusion: The SEC continues to actively pursue projects offering unregistered securities in the NFT market. Actions against Flyfish Club and other projects highlight the regulator's commitment to enforce securities laws in the crypto space.
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