In this week’s newsletter, read about Galaxy Digital securing a loan using a non-fungible token (NFT) of a historical violin and how NFT sales plummeted in May. Find out what the U.S. Treasury thinks about NFTs and how Bitcoin NFTs have reached a new milestone. In other news, Dapper Labs CEO Roham Gharegozlou insists NFTs are not securities after reaching settlement in NBA Top Shot Moments lawsuit.
Galaxy Digital uses historic violin NFT to secure loans
Michael Novogratz’s Galaxy Digital and Animoca Brands co-founder Yat Siu tokenized a 300-year-old violin as collateral for a loan. Galaxy lent Siu an undisclosed amount, and to secure the loan, Animoca executives used NFTs of a historic Stradivarius violin and physical assets as collateral.
This violin once belonged to the Russian Empress Catherine the Great. Tarisio, a musical instrument auction house, traces the origins of the violin back more than 300 years. Siu acquired the violin at an auction in 2023 for $9 million.
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NFT Sales Plunge 54% in May: CryptoSlam
NFT sales recently showed an upward trend in April, but then declined in May. According to CryptoSlam, April sales of NFTs exceeded $1 billion. However, in May, transaction volume fell to $624 million, a 54% decrease from the previous month.
Bitcoin-based NFTs saw a 68% decline in sales in May. Other top NFT blockchains, including Solana and Ethereum, also recorded downward trends. Solana-based collectibles fell 48%, while Ethereum NFTs fell 55%.
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A U.S. Treasury report outlines the potential financial risks of NFTs.
The U.S. Treasury released a risk assessment on NFTs to provide insight to regulators. The department highlighted several security concerns, including the potential for terrorists to use NFTs to fund their operations.
In addition to terrorist financing, state actors could use NFTs to finance nuclear proliferation and conduct money laundering, the Treasury Department said. Additionally, government agencies said investors risk having the rug pulled out from under them or stolen.
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Bitcoin NFT, all-time sales volume exceeds $4 billion
NFTs based on the Bitcoin blockchain have recorded historical sales of $4 billion. According to data from NFT tracker CryptoSlam, on June 4, all-time trading volume for Bitcoin-based NFTs reached $3.97 billion, with laundering volume reaching $82 million.
Bitcoin-based digital collectibles also topped the list over the past 30 days, with $171 million in sales. Meanwhile, last month’s sales of Ethereum-based collectibles amounted to only $159 million.
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Dapper Labs’ $4M Settlement Reaffirms NBA NFTs Are Not Securities: CEO
Dapper Labs, the company behind NBA Top Shot Moments NFTs, has signed a $4 million deal to end a class action lawsuit alleging that NFTs were sold as unregistered securities.
The company’s CEO, Roham Gharegozlou, argued that the case showed that NFTs on decentralized public networks are not securities “just as trading cards are not securities.”
According to the settlement, Dapper Labs agreed to pay $4 million if the plaintiffs cease claiming that NFTs are securities. It also included ensuring that the Flow blockchain was sufficiently decentralized to remain outside of the company’s control.
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Thank you for reading our digest of this week’s most noteworthy developments in the NFT space. Come back next Wednesday for more reports and insights into this actively developing space.