This week’s newsletter features Galaxy Digital utilizing a nonfungible token (NFT) of an historic violin as collateral for a loan and the decrease in NFT sales volume in May. Discover the United States Treasury Department’s perspective on NFTs and the milestone reached by Bitcoin NFTs. Additionally, Dapper Labs CEO Roham Gharegozlou asserts that NFTs are not securities following a settlement regarding the NBA Top Shot Moments lawsuit.
Galaxy Digital Secures Loan with Historic Violin NFT
Galaxy Digital, led by Michael Novogratz, partnered with Animoca Brands co-founder Yat Siu to tokenize a 300-year-old violin as collateral for a loan. Siu borrowed an undisclosed amount from Galaxy, using an NFT of the renowned Stradivarius violin and the physical asset as security. The instrument, previously owned by Russian Empress Catherine the Great, was acquired by Siu in a 2023 auction for $9 million.
NFT Sales Volume Declines by 54% in May: CryptoSlam
Despite a rise in April, NFT sales experienced a significant drop in May. CryptoSlam reported that NFTs generated over $1 billion in sales volume in April, which plummeted to $624 million in May, marking a 54% decrease month-on-month. Sales of Bitcoin-based NFTs also decreased by 68% in May, with other leading NFT blockchains like Solana and Ethereum showing similar downward trends.
U.S. Treasury Report Identifies Financial Risks of NFTs
The United States Treasury Department released a risk assessment on NFTs to inform regulators of potential financial risks associated with these digital assets. The report highlighted concerns such as the possibility of terrorists using NFTs to finance activities, state actors funding nuclear proliferation and money laundering, as well as risks to investors related to rug pulls and theft.
Bitcoin NFTs Surpass $4 Billion in Total Sales Volume
NFTs based on the Bitcoin blockchain achieved a record-breaking total sales volume of $4 billion. Data from NFT tracker CryptoSlam on June 4 revealed that Bitcoin-based NFTs reached a total volume of $3.97 billion, with a wash volume of $82 million. Bitcoin-based digital collectibles also led in sales volume in the last 30 days, generating $171 million, surpassing Ethereum-based collectibles which had a sales volume of $159 million.
Dapper Labs Settles $4 Million Lawsuit, Affirming NBA NFTs as Non-Securities: CEO
Dapper Labs, the company behind NBA Top Shot Moments NFTs, settled a $4 million class-action lawsuit alleging that the NFTs were sold as unregistered securities. CEO Roham Gharegozlou stated that the case confirmed NFTs on a decentralized public network are not securities, similar to trading cards. The settlement included Dapper Labs paying $4 million on the condition that the plaintiffs no longer consider the NFTs as securities, and ensuring that the Flow blockchain remains decentralized and independent from the company’s influence.
Thank you for reading this summary of the latest NFT developments. Visit again next Wednesday for more updates and insights on the dynamic NFT market.