This week’s newsletter features Galaxy Digital using a nonfungible token (NFT) of a historic violin to secure a loan, along with a significant drop in NFT sales volume in May. Discover the United States Treasury Department’s stance on NFTs and the latest milestone reached by Bitcoin NFTs. Additionally, Dapper Labs CEO Roham Gharegozlou asserts that NFTs are not securities following a settlement in the NBA Top Shot Moments lawsuit.
Galaxy Digital Utilizes 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 borrowed an undisclosed sum from Galaxy, using an NFT of the renowned Stradivarius violin and the physical instrument as collateral. The violin, once owned by Russian Empress Catherine the Great, was acquired by Siu in a 2023 auction for $9 million.
NFT Sales Volume Plummets by 54% in May: CryptoSlam
Despite a surge in April, NFT sales experienced a significant decline in May. CryptoSlam reported that NFT sales volume exceeded $1 billion in April but dropped to $624 million in May, marking a 54% decrease month-on-month. Bitcoin-based NFTs saw a 68% decrease in sales, while other top NFT blockchains like Solana and Ethereum also recorded downward trends with drops of 48% and 55%, respectively.
U.S. Treasury Report Highlights Financial Risks of NFTs
The United States Treasury Department issued a risk assessment on NFTs to inform regulators about potential threats. The report raised concerns about security issues such as terrorist financing, state actors funding nuclear proliferation, and money laundering through NFTs. Additionally, the Treasury warned investors about risks like rug pulls and theft.
Bitcoin NFTs Reach $4 Billion in Total Sales Volume
NFTs based on the Bitcoin blockchain achieved a total sales volume of $4 billion. Data from NFT tracker CryptoSlam revealed that Bitcoin-based NFTs had an all-time volume of $3.97 billion and a wash volume of $82 million on June 4. Bitcoin-based digital collectibles also led in sales volume with $171 million in the last 30 days, surpassing Ethereum-based collectibles which only totaled $159 million.
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 claiming the NFTs were unregistered securities. CEO Roham Gharegozlou stated that the case affirmed NFTs on a decentralized network are not securities, similar to trading cards. The settlement required Dapper Labs to pay $4 million if the plaintiffs ceased labeling the NFTs as securities and ensured the decentralization of the Flow blockchain.
Thank you for exploring the latest developments in the NFT space with us. Join us again next Wednesday for more updates and insights on this rapidly evolving industry.