Artists sue SEC over NFT status, DraftKings kills NFT business: Nifty Newsletter

Two artists have taken legal action to demand clarification from the SEC over the status of NFTs.

In this week’s newsletter, read about how filmmaker Brian Frye and songwriter Jonathan Mann sued the United States Securities and Exchange Commission to clarify whether or not non-fungible tokens (NFTs) are securities, and find out why betting platform DraftKings is winding down its NFT business after facing legal developments. In other news, NFTs are facing their lowest monthly sales volume in 2024, video game pioneer Atari is bringing classic games onchain, and NFT and gaming blockchain Ronin has surpassed other networks in daily active users. 

Artists sue SEC over confusing security status of NFTs

Law professor and filmmaker Brian Frye and songwriter Jonathan Mann are suing the SEC to determine whether NFTs fall under the government agency’s authority.

Lawyers representing the artists seek clarification on which acts could trigger securities laws regarding minting and selling art NFTs. The lawyers used Taylor Swift tickets as an example and argued that classifying NFTs as securities would be absurd.

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DraftKings kills NFT business, citing “legal developments”

DraftKings, a popular sports betting platform, has wound down its NFT business because of “legal developments.” On July 31, the company reportedly told users it would discontinue its NFT marketplace and fantasy sports game Reignmakers.

The announcement comes four weeks after a judge denied the company’s motion to dismiss a class-action suit alleging that their NFTs were unregistered securities.

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NFTs face lowest monthly sales since November 2023

NFTs are set to record their lowest monthly volume of 2024 in July. With only $393 million in recorded sales volume, NFTs are about to break the $438 million record set in June for the lowest monthly volume in NFT sales in 2024.

Even though NFTs experienced lower volumes, digital collectibles saw increased transaction volumes for the month. CryptoSlam data showed that almost 10 million NFT transactions occurred in July, a 73% increase from June’s record of 5.7 million transactions.

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Gaming blockchain Ronin records two million daily active users: Token Terminal

NFT gaming platform Ronin recorded two million daily active users on July 29, surpassing major blockchains in user activity on the day. The network surpassed other active chains like Tron and Solana, which had 1.8 million and 1.2 million active users, respectively.

In its mid-year review, the Ronin network highlighted factors that may have influenced the increase in active users. According to the report, this may have been partly driven by a surge in volume for its NFT marketplace, Mavis Market and many other ecosystem updates.

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Atari to bring retro games onchain with Base

Video game pioneer Atari’s Web3 venture AtariX is bringing its classic games to the layer-2 network Base, starting with its shooter game Asteroids. The gaming firm said it would bring more games to the blockchain but did not specify which games would be next.

Users who want to play can mint an NFT access pass, which allows them to compete against other players in an online leaderboard. While the game can be played for free online, players who play through AtariX can get rewards like a $1,000 Atari gift card.

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Thanks for reading this digest of the week’s most notable developments in the NFT space. Come again next Wednesday for more reports and insights into this actively evolving space.