This week’s newsletter features Galaxy Digital using a nonfungible token (NFT) of a historic violin as collateral for a loan and the decrease in NFT sales volume in May. Learn about the United States Treasury Department’s concerns regarding NFTs and the milestone reached by Bitcoin NFTs. Additionally, Dapper Labs CEO Roham Gharegozlou asserts that NFTs are not securities following a settlement on 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 and the physical asset to secure an undisclosed loan amount from Galaxy.
The violin, once owned by Russian Empress Catherine the Great, was purchased by Siu at auction in 2023 for $9 million. Tarisio, a musical instrument auction house, traced the violin’s history back over three centuries.
NFT Sales Volume Drops by 54% in May: CryptoSlam
May saw a significant decline in NFT sales despite a previous increase in April. CryptoSlam reported that NFT sales volume exceeded $1 billion in April but plummeted to $624 million in May, marking a 54% decrease.
Bitcoin-based NFTs experienced a 68% drop in sales during May, with other top NFT blockchains, including Solana and Ethereum, also showing downward trends. Solana-based collectibles saw a 48% decrease, while Ethereum NFTs dropped by 55%.
U.S. Treasury Warns of Financial Risks Associated with NFTs
The United States Treasury Department released a risk assessment on NFTs, highlighting potential security threats for regulators. Concerns include the possibility of terrorist financing, state actors funding nuclear proliferation, money laundering, and risks to investors such as 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 a total volume of $3.97 billion and a wash volume of $82 million as of June 4.
Bitcoin-based digital collectibles led sales with $171 million in the last 30 days, surpassing Ethereum-based collectibles, which only reached $159 million in sales volume last month.
Dapper Labs Settlement Confirms 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 determined NFTs on a decentralized public network are not securities, similar to trading cards.
The settlement required Dapper Labs to pay $4 million to end claims that the NFTs were securities and to ensure the decentralization of the Flow blockchain, removing company control.
Thank you for reading this recap of the week’s significant NFT developments. Check back next Wednesday for more updates and insights on this dynamic industry.