The trend of suing a crypto-based company for selling unregistered securities has surged significantly in the past few years.
A recent lawsuit filed by the U.S SEC over the NFT FlyFish Club has come to a settlement as it agreed to pay a fine of $750,000. Following the settlement, two SEC commissioners slammed their agency over the lawsuit on Flyfish Club, a non-fungible token-themed restaurant.
The summary of the SEC’s lawsuit writes, “ Between August 2021 and May 2022, Flyfish conducted an unregistered offering of crypto asset securities by offering and selling to the public, including U.S. investors, approximately 1,600 non-fungible tokens (“NFTs”) at two price points.”
Adding, “The first price point was for the Flyfish NFT priced at 2.5 ETH (~$8,400), and the second price point was for the Omakase NFT priced at 4.25 ETH (~$14,300). The offering generated gross proceeds of approximately $14.8 million.”
In a statement published on September 16, Commissioner Hester Peirce and Mark Uyeda criticized the SEC, stating that “Flyfish Club sold NFTs unique digital tokens recorded on a blockchain as the exclusive way to access a yet-to-be-built restaurant and bar.”
Further quoting, “This case is not one in which the Commission alleges fraud; it finds only that Flyfish Club should have registered its sale of membership NFTs as securities transactions.”
Major Lawsuits by the U.S. SEC
Binance and its former CEO are battling a legal tussle with the SEC; the lawsuit was filed over the charges of manipulating the trading volume on the exchange artificially, including other charges.
The Ripple vs. SEC lawsuit has been a hot topic in the crypto market, with the Securities and Exchange Commission (SEC) claiming that Ripple sold XRP as an unregistered security, while Ripple argues that XRP is a digital currency, not a security.
The Securities and Exchange Commission first filed the lawsuit in December 2020; the decision on the case is still awaited.
Several other crypto and blockchain-based companies have received a well notice and a warning; some have even paid huge penalties.
Some recently published reports claim that among all regulators globally, the U.S Securities and Exchange Commission has collected the highest penalties from NFTs issuers, exchanges, and other digital asset/blockchain-based companies.
Crypto Market Price Update
When writing, the fear and greed index powered by CoinMarketCap was at 34, reflecting a fear sentiment in the vast market; at the same time, the cryptocurrency market capitalization was $2.03 trillion with an intraday decline of over 1.50%.
Helium, SEI, and Beam are closely competing to top the intraday loser list, with an average loss of 7% in the past 24 hours. Fantom had acquired the top position on the gainers list, adding 9.50% and reaching $0.5338.
DOGS, the memecoin that debuted in the market this year, has lost over 40.21% of its trading price, reaching $0.0009574. Baby Doge Coin, recently listed on Binance, grew 17.26% intraday, reaching $0.001817.
Until publishing, Bitcoin was trading at $58,361 with an intraday decline of 1.00%; despite the lack of instability in prices in the past few months, BTC’s market dominance continued to grow to reach 57.16%.
