Michaela
U.S. Securities and Exchange Commission (SEC) Commissioner Hester Peirce has stated that many non-fungible tokens (NFTs) don’t carry the economic rights typical of securities, amid ongoing debates over how to regulate digital assets.
At the SEC Speaks event on May 19, the head of the SEC’s Crypto Task Force noted that while most NFTs may not meet the definition of securities, some tokens structured to provide ongoing compensation to creators could potentially fall outside the purview of federal securities regulations.
“These NFTs are powered by smart contracts, which can be programmed to transmit automatically a portion of the sale price of an NFT to the creator of the artwork as a royalty each time that it is re-sold,” Peirce stated.
Peirce compared this mechanism to royalty models used by streaming platforms, where creators earn revenue each time their content is accessed. Similarly, NFTs can allow artists to participate in the ongoing value growth of their work beyond the initial sale, offering a new model for sustained compensation in digital art markets.
Furthermore, Peirce clarified that crypto assets designed solely for use or consumption—rather than representing economic rights, business interests, or financial entitlements such as ownership stakes, debt claims, revenue shares, or dividend payments—should not fall under the scope of federal securities laws.
Although Peirce categorized several NFTs as non-securities, she emphasized that her statements reflected her personal views and not the official position of the Commission or her fellow Commissioners. Additionally, the SEC has yet to issue formal guidance on the regulatory status of NFTs, leaving uncertainty around how these digital assets will ultimately be treated under federal securities laws.
Since taking the helm of the SEC’s Crypto Task Force, Hester Peirce has stepped up efforts to engage with the digital asset sector. Under her leadership, the task force has organized a series of industry roundtables, invited public feedback, and collaborated with legislators to explore possible frameworks for governing the evolving crypto space.
The task force was established as part of the SEC’s broader initiative to develop clearer regulatory guidelines for the digital asset sector, marking a shift from the agency’s earlier enforcement-driven approach under former Chair Gary Gensler.
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Michaela has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
