Brian Frye, an artist and a law professor at the University of Kentucky, recently shared his thoughts on NFTs. As per him, NFTs are securities, and it is something that should be laid emphasis on. He wrote about why NFTs represent investment contracts with social clout.
I wrote an essay for @CoinDesk about how I learned to stop worrying & embrace the reality that NFTs “are” securities. https://t.co/1AFO9BGGLT— Brian L. Frye (@brianlfrye) December 28, 2022
Addressing the ongoing fear in the market related to the NFT market speculations about being considered securities and regulated by the U.S. Securities and Exchange Commission, Frye affirmed that NFTs are securities for sure. In addition to this, he mentioned that being a type of security is the characterization that makes them so powerful and promising.
In accordance with what Brian Frye stated, the art market has always been a securities market, and it is a market for “art as an investment.” Mentioning the functioning of the NFT market, he said that it eliminates the object and allows the collectors to trade ledger entries directly instead of through a proxy.
This is great because, this way, it is way cheaper and more efficient than trading. A fractional interest in the commercial goodwill linked with an artist, or instead, a share of the clout of an artist. You will be able to sell your NFT at a profit if the artist becomes popular, but if that doesn’t happen, your NFT will be worthless.
Moreover, it was revealed that the SEC is able to regulate the art and NFT markets, but at present, they don’t want that, and even if they want, it is highly unlikely that they will regulate the asset class heavily. Conclusively, he addressed the fact that we live in a world of digital abundance that has yet to be realized, and maybe NFTs can help us get to the promised land.
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