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

Planet News: In a public speech, Hester Peirce, a commissioner of the U.S. Securities and Exchange Commission (SEC), clearly stated that Non-Fungible Tokens with creator royalty mechanisms are typically not considered securities. Peirce pointed out that the feature of Non-Fungible Tokens allowing artists to profit from resales is similar to streaming platforms paying creators royalties, and this profit distribution does not constitute the "enterprise profit sharing" defined in traditional securities. Oscar Franklin Tan, Chief Legal Officer of Atlas Development Services, added that some media misinterpreted Peirce's statement, emphasizing that the SEC has never viewed 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 a Non-Fungible Token design involves distributing royalty profits to multiple holders, it may trigger securities compliance issues. (Cointelegraph)