US SEC Commissioner Peirce: NFT royalty mechanism does not make tokens securities

CoinRank News: Hester Peirce, a member of the U.S. Securities and Exchange Commission (SEC), made it clear in a public speech that NFTs with a creator royalty mechanism are generally not securities. Peirce pointed out that the feature of NFTs that allows artists to profit from resales is similar to the model of streaming platforms paying creators for copyrights, and this distribution of income does not constitute the corporate profit-sharing right in the traditional definition of securities. Oscar Franklin Tan, chief legal officer of Atlas Development Services, added that some media have misinterpreted Peirces statement, emphasizing that the SEC has never regarded creator royalties as securities regulatory objects. He explained that when royalties belong only to the original creator, their nature is closer to business income rather than investment income; but if the NFT design involves the distribution of royalty profits to multiple holders, it may trigger securities compliance issues. (Cointelegraph)