US SEC Commissioner Peirce: NFT royalty mechanism does not make tokens securities

Mars Finance News: U.S. Securities and Exchange Commission (SEC) Commissioner Hester Peirce clearly stated in a public speech that Non-Fungible Tokens (NFTs) with creator royalty mechanisms generally do not fall under the securities category. Peirce noted that the NFT feature allowing artists to profit from resale is similar to streaming platforms paying creators royalties, and such profit distribution does not constitute the "enterprise profit sharing" defined in traditional securities. Atlas Development Services Chief Legal Officer Oscar Franklin Tan added that some media misinterpreted Peirce's statement, emphasizing that the SEC has never considered creator royalties as a subject of securities regulation. He explained that when royalties belong solely to the original creator, their nature is closer to "business income" rather than "investment returns"; however, if an NFT design involves distributing royalty profits to multiple holders, it may trigger securities compliance issues. (Cointelegraph)