This week’s newsletter highlights Galaxy Digital’s innovative use of a nonfungible token (NFT) representing a historic violin to secure a loan, along with the sharp decline in NFT sales volume in May. Explore the United States Treasury Department’s perspective on NFTs and the recent milestone achieved by Bitcoin NFTs. Additionally, Dapper Labs CEO Roham Gharegozlou asserts that NFTs are not securities following a settlement in the NBA Top Shot Moments lawsuit.
Galaxy Digital Utilizes Historic Violin NFT for Loan Collateral
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 secured an undisclosed amount from Galaxy, using an NFT of the renowned Stradivarius violin and the physical instrument itself as collateral. The violin, once owned by Russian Empress Catherine the Great, was acquired by Siu in a 2023 auction for $9 million.
NFT Sales Volume Drops 54% in May, Reports CryptoSlam
Despite a surge in April, NFT sales experienced a significant decline in May. CryptoSlam data reveals that NFT sales volume plummeted from over $1 billion in April to $624 million in May, marking a 54% decrease. Bitcoin-based NFTs saw a 68% decline in sales, while other leading NFT blockchains like Solana and Ethereum also reported downward trends with drops of 48% and 55%, respectively.
U.S. Treasury Warns of Financial Risks Associated with NFTs
The United States Treasury Department released a risk assessment report on NFTs, highlighting potential security threats that could arise from their use. Concerns raised include the possibility of terrorists using NFTs to finance illicit activities, state actors exploiting them for nefarious purposes like nuclear proliferation and money laundering, and risks to investors such as rug pulls and theft.
Bitcoin NFTs Achieve $4 Billion in Total Sales Volume
NFTs built on the Bitcoin blockchain reached a milestone with a total sales volume of $4 billion. CryptoSlam data on June 4 revealed that Bitcoin-based NFTs amassed a $3.97 billion all-time volume, with a recent wash volume of $82 million. Bitcoin-based digital collectibles dominated sales in the last 30 days with $171 million, surpassing Ethereum-based collectibles which only generated $159 million in sales.
Dapper Labs’ $4 Million Settlement Confirms NBA NFTs Are Not Securities
Dapper Labs, the company behind NBA Top Shot Moments NFTs, settled a class-action lawsuit for $4 million, dispelling claims that the NFTs were unregistered securities. CEO Roham Gharegozlou emphasized that the case affirmed NFTs on a decentralized public network are not securities, likening them to traditional trading cards. The agreement stipulated that Dapper Labs would pay $4 million to cease securities allegations and ensure the decentralization of the Flow blockchain.
Thank you for exploring the latest developments in the dynamic NFT landscape. Join us next Wednesday for more insights and updates on this rapidly evolving sector.