Discover in this week’s newsletter how Galaxy Digital utilized a nonfungible token (NFT) of a historic violin as collateral for a loan and learn about the significant drop in NFT sales volume in May. Delve into the perspectives of the United States Treasury Department on NFTs and the latest milestone reached by Bitcoin NFTs. Additionally, explore Dapper Labs CEO Roham Gharegozlou’s assertion that NFTs are not securities following a settlement regarding the NBA Top Shot Moments lawsuit.
Galaxy Digital Innovates with Historic Violin NFT for Loan Security
Galaxy Digital, led by Michael Novogratz, partnered with Animoca Brands co-founder Yat Siu to tokenize a 300-year-old violin as collateral for a loan. Siu, utilizing an NFT of the renowned Stradivarius violin alongside the physical asset, secured an undisclosed amount from Galaxy Digital. The violin, once belonging to Russian Empress Catherine the Great, was acquired by Siu in a 2023 auction for $9 million after its lineage was traced back over three centuries by musical instrument auction house Tarisio.
NFT Sales Volume Plummets by 54% in May: CryptoSlam
Despite a surge in April, NFT sales experienced a significant decline in May. CryptoSlam reported a drop from over $1 billion in April to $624 million in May, marking a 54% decrease in sales volume. Bitcoin-based NFTs saw a 68% decline, while other leading NFT blockchains like Solana and Ethereum also witnessed downward trends with Solana-based collectibles dropping by 48% and Ethereum NFTs by 55%.
U.S. Treasury Report Highlights Financial Risks Associated with NFTs
The United States Treasury Department released a risk assessment on NFTs to inform regulators about potential financial risks. The report underscored concerns about terrorist financing, state actors funding nuclear proliferation, money laundering, and risks to investors such as rug pulls and theft associated with NFTs.
Bitcoin NFTs Reach $4 Billion in Total Sales Volume
NFTs on the Bitcoin blockchain achieved a milestone with a total sales volume of $4 billion. According to data from NFT tracker CryptoSlam, Bitcoin-based NFTs accumulated a $3.97 billion all-time volume and a wash volume of $82 million. In the last 30 days, Bitcoin-based digital collectibles dominated with a sales volume of $171 million, surpassing Ethereum-based collectibles at $159 million.
Dapper Labs’ $4 Million Settlement Affirms NBA NFTs are not Securities: CEO
Dapper Labs, the company behind NBA Top Shot Moments NFTs, settled a class-action lawsuit for $4 million, dispelling claims that the NFTs were sold as unregistered securities. CEO Roham Gharegozlou emphasized that NFTs on a decentralized public network are akin to trading cards and are not securities. The settlement required Dapper Labs to pay $4 million and ensure that the Flow blockchain remains sufficiently decentralized and independent from the company’s control.
We appreciate your readership and hope to see you again next Wednesday for more updates and insights on the ever-evolving NFT landscape.