Understanding Bored Apes and NFT Status

When pondering whether a Bored Ape should be classified like stock in Apple or Microsoft, the answer seems like a no-brainer—just like a toddler’s failed attempt at hide and seek. Bored Apes are non-fungible tokens (NFTs), unique digital assets that often represent distinctive artworks. But the question remains, is there a case for them being securities?

The Legal Landscape of NFTs

In the realm of legal definitions, NFTs dance like wallflowers at a middle school dance. While some folks propose NFTs could be treated as securities, let’s take a look at varying opinions to appreciate the diverse choreography.

• The U.S. Commodity Futures Trading Commission views them as virtual commodities. Cha-ching!
• The IRS is busy with their ‘look-through analysis’ to determine if an NFT is classified as a collectible.
• Meanwhile, the SEC ruminates about the definition of a security without ever RSVPing to the party.

Can a Judge Define the Future of NFTs?

Judge Victor Marrero of the U.S. District Court for the Southern District of New York recently entertained the idea that some NFTs could indeed be securities. However, he didn’t declare a blanket statement. Rather, he noted the peculiar case of Dapper Labs’ “Moments,” which seemed to have a more substantial legal relationship with investors than your average piece of digital art.

“It is the particular scheme by which Dapper Labs offers Moments that creates the sufficient legal relationship between investor and promoter…”

So, What Makes NFTs Not Securities?

When we consider the essence of NFTs, we find that they promote authenticity and uniqueness in a world where digital copies threaten to devalue everything. Simply put, most NFTs are akin to art collections, not investment portfolios. If an NFT creator treats their work as speculative rather than a piece for admiration, they might just face the securities music—a tragic opera, indeed.

Call to Action for the NFT Community

Before the SEC throws a wet blanket on the NFT community, let’s rally the troops. It’s crucial to urge lawmakers like crypto-friendly House Majority Whip Tom Emmer to define NFTs explicitly as non-securities unless touted expressly as speculative investments. A world where artists face the regulatory wrath of the SEC over their digital art is a reality we should avoid like gym class in high school.