NFT risks
Posted: 11 May 2021, 18:27
Legal uncertainty and regulatory attention
On April 21st, a collection of 50 CryptoPunks in the form of NFTs was split into millions of tokens, each representing a stake in the collection. This move will allow even small investors to gain access to characters that are traded for several thousand or even hundreds of thousands of dollars. However, the problem is that regulators can treat such tokens as unregistered securities. Indeed, even though the NFT market is on the rise, it is still unclear how these assets will fit into the existing regulatory framework. Moreover, experts are already warning that in the future, NFT projects may face additional legal and regulatory difficulties, and the market may face liquidity problems, volatility, and the deflation of the NFT bubble. We figured out the new trend for splitting NFTs and what risks are associated with investing in the NFT sector and how to avoid them.
On April 21st, a collection of 50 CryptoPunks in the form of NFTs was split into millions of tokens, each representing a stake in the collection. This move will allow even small investors to gain access to characters that are traded for several thousand or even hundreds of thousands of dollars. However, the problem is that regulators can treat such tokens as unregistered securities. Indeed, even though the NFT market is on the rise, it is still unclear how these assets will fit into the existing regulatory framework. Moreover, experts are already warning that in the future, NFT projects may face additional legal and regulatory difficulties, and the market may face liquidity problems, volatility, and the deflation of the NFT bubble. We figured out the new trend for splitting NFTs and what risks are associated with investing in the NFT sector and how to avoid them.