US Securities and Exchange Commission Penalizes Flyfish Club with $750K Fine for NFT Sales Infractions
The U.S. Securities and Exchange Commission (SEC) has issued an order against Flyfish Club, LLC, for the unregistered sale of non-fungible tokens (NFTs). The decision has drawn criticism from within the agency itself, highlighting a growing divide over how NFTs and other digital assets should be regulated under U.S. securities laws.
SEC Takes Action Against Flyfish Club Over NFT Sales
The SEC has charged Flyfish Club, a New York-based company, for raising approximately $14.8 million through the sale of around 1,600 NFTs between August 2021 and May 2022. These NFTs were marketed as memberships that would grant holders exclusive access to a planned high-end dining club.
The regulatory agency’s enforcement action asserts that Flyfish’s NFTs qualify as securities under federal law due to their potential for resale at higher values and the possibility of earning passive income through leasing.
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