In the latest newsletter, discover 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. Explore the United States Treasury Department’s perspective on NFTs and the new milestone reached by Bitcoin NFTs. Additionally, find out about Dapper Labs CEO Roham Gharegozlou’s assertion that NFTs are not securities following a settlement on the NBA Top Shot Moments lawsuit.
Galaxy Digital Secures Loan with Historic Violin NFT
Michael Novogratz’s Galaxy Digital, along with Animoca Brands co-founder Yat Siu, tokenized a 300-year-old violin as collateral for a loan. Siu obtained an undisclosed sum from Galaxy, using an NFT of the Stradivarius violin and the physical instrument as collateral.
Previously owned by Russian Empress Catherine the Great, the violin’s lineage dates back over three centuries, as confirmed by musical instrument auction house Tarisio. Siu acquired the violin in a 2023 auction for $9 million.
NFT Sales Volume Plunges 54% in May: CryptoSlam
Despite a surge in April, NFT sales experienced a significant decline in May. CryptoSlam reported that NFTs generated over $1 billion in sales volume in April, which plummeted to $624 million in May, marking a 54% decrease month-on-month.
Bitcoin-based NFTs saw a 68% drop in sales in May, while other major NFT blockchains like Solana and Ethereum also observed downward trends. Solana-based collectibles witnessed a 48% decline, and Ethereum NFTs dropped by 55%.
U.S. Treasury Warns of Financial Risks Associated with NFTs
The United States Treasury Department issued a risk assessment report on NFTs to inform regulators about potential hazards. The report highlighted security concerns, including the possibility of terrorists using NFTs to finance illicit activities.
In addition to terrorist financing, the Treasury warned about state actors utilizing NFTs for nefarious purposes like nuclear proliferation and money laundering. The report also emphasized the risks faced by investors, such as rug pulls and theft.
Bitcoin NFTs Achieve $4 Billion in Total Sales Volume
NFTs based on the Bitcoin blockchain reached a record-breaking sales volume of $4 billion. Data from NFT tracker CryptoSlam revealed that Bitcoin-based NFTs amassed a total volume of $3.97 billion and a wash volume of $82 million.
Bitcoin-based digital collectibles dominated sales in the last 30 days with a volume of $171 million, surpassing Ethereum-based collectibles, which only recorded $159 million in sales volume last month.
Dapper Labs’ $4 Million Settlement Confirms NBA NFTs as Non-Securities: CEO
Dapper Labs, the company behind NBA Top Shot Moments NFTs, settled a $4 million class-action lawsuit alleging that the NFTs were unregistered securities. CEO Roham Gharegozlou asserted that NFTs on a decentralized public network are not securities, likening them to trading cards.
The settlement required Dapper Labs to pay $4 million in exchange for the plaintiffs dropping their claims that the NFTs were securities. It also mandated that the Flow blockchain operate in a sufficiently decentralized manner beyond the company’s control.
Thank you for exploring the latest developments in the NFT space with us. Join us again next Wednesday for more updates and insights into this rapidly evolving industry.