Discover the latest updates in the world of nonfungible tokens (NFTs) in this week’s newsletter. Learn about Galaxy Digital’s unique use of an NFT of a historic violin as collateral for a loan, as well as the significant decline in NFT sales volume in May. Find out what the United States Treasury Department has to say about the potential financial risks associated with NFTs and how Bitcoin NFTs have reached a new milestone. Additionally, hear from Dapper Labs CEO Roham Gharegozlou on why NFTs are not considered securities following a settlement in the NBA Top Shot Moments lawsuit.
Galaxy Digital Secures Loan with Historic Violin NFT
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 used an NFT of the Stradivarius violin, along with the physical asset, to secure the undisclosed loan amount from Galaxy. The violin, once owned by Russian Empress Catherine the Great, was purchased by Siu in a 2023 auction for $9 million.
NFT Sales Volume Plummets in May
Despite a surge in April, NFT sales experienced a significant decline in May. According to CryptoSlam, NFT sales volume dropped from over $1 billion in April to $624 million in May, marking a 54% decrease. Bitcoin-based NFTs saw a 68% drop in sales, while other top NFT blockchains like Solana and Ethereum also recorded downward trends with a 48% and 55% decline, respectively.
U.S. Treasury Warns of Financial Risks Associated with NFTs
The United States Treasury Department issued a risk assessment report on NFTs, highlighting potential security concerns such as terrorist financing, nuclear proliferation funding, and money laundering. The report also emphasized risks for investors, including rug pulls and thefts associated with NFT investments.
Bitcoin NFTs Achieve $4 Billion in Sales Volume
NFTs based on the Bitcoin blockchain reached an all-time sales volume of $4 billion. Data from NFT tracker CryptoSlam revealed that Bitcoin-based NFTs had a total volume of $3.97 billion and a wash volume of $82 million. In the last 30 days, Bitcoin-based digital collectibles surpassed Ethereum-based collectibles with a sales volume of $171 million compared to $159 million.
Dapper Labs Settlement Affirms NBA NFTs are Not Securities
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 stated that the case confirmed NFTs on a decentralized public network are not securities, similar to traditional trading cards. The settlement required Dapper Labs to pay $4 million and ensure 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 dynamic and rapidly evolving industry.