Morning Minute | Every NFT Is A Security

Morning Minute | Every NFT Is A Security

TylerD's Market Summary

The latest SEC filing against Stoner Cats has many thinking that is indeed the case and that NFTs are in trouble. Is it true? Read on for more, plus catch up on a major Yuga proposal and the latest in Friend Tech.

๐Ÿ‘จ‍โš–๏ธ The SEC Charges Stoner Cats

The next domino has fallen in the SEC vs NFTs.

Yesterday news broke that the SEC is charging Stoner Cats with selling unregistered securities via their NFT sale.

Some highlights from the filing (from our Lucky Trader post):

  • Stoner Cats sold over 10,000 NFTs at $800 each ($8M in fees) in just 35 minutes in 2021
  • Their marketing revolved around building out a TV series with well-known actors and touted their expertise as Hollywood producers
  • They also expressed that holders could potentially participate in that series and alleged to emphasize potential for resale value and team expertise
  • Through these actions, they violated the Securities Act of 1933 by selling unregistered public offerings
  • Stoner Cats agreed to cease and desist and to pay a $1M civil fine, plus set up a Fair Fund for holder retribution

The piece that got many in the NFT market up-in-arms though was a specific quote from the filing.

“Regardless of whether your offering involves beavers, chinchillas or animal-based NFTs, under the federal securities laws, it’s the economic reality of the offering – not the labels you put on it or the underlying objects – that guides the determination of what’s an investment contract and therefore a security,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement.

I see the cause for concern, but personally, I'm not as worried.

The SEC is clearly going after the biggest names and slam-dunk cases.

Stoner Cats was very unique in that it had celebrities like Ashton Kutcher involved in promotion, and that it was launching a TV show with the NFT proceeds.

That's a bit different (and degrees bigger) than your average jpeg animal roadmap.

So is every NFT a security? No, and most are likely safe. 

But expect more dominoes to fall this year as the SEC continues to make examples out of some of the loudest and most obvious cases.

๐Ÿ™ˆ Machi's Proposal Goes Live 

It's good to have influence.

Notable NFT farmer and whale Machi Big Brother has raised a proposal for the ApeDAO which will go to vote starting tonight.

The proposal? To spend 11M $APE* ($12.5M) on Yuga NFTs (BAYC, MAYC, BAKC and Punks) as a part of a digital art movement. *An important caveat in the proposal - the DAO can't buy Machi's NFTs.

The idea is that the DAO would buy these and then work with museums to get them displayed around the globe.

How altruistic of Machi.

So what happens if this passes?

Well one has to assume the $12M influx into the market would make the Yuga NFTs go up, pending the time frame of spending and allocation.

But then there's $APE. $APE will have to be converted to ETH for these buys. 

If you haven't looked lately, $APE is down 40% this month and 80% since February's local top over $6. 

That sell pressure on $APE will be hard to overcome, and one would imagine it drives $APE lower. The problem there - BAYC assets are farmed for $APE. So maybe they in fact do go lower because of this.

So it's not clear that this $12M influx will have positive impacts - but it's still likely the most important story to watch in NFTs as the vote plays out through Sept 20.

๐Ÿ‘ฅ Friend Tech Trend Tracker

The ATHs - they just keep on coming.

Wednesday was another wild day in the Friend Tech market, with TVL soaring, volume soaring, major new entrants and more.

Here are some of the core Friend Tech metrics for 9/13 and their day-over-day change:

  • New users: 3,912 -> 5,097 (+64%)
  • Return users: 8,243 -> 10,807 (+12%)
  • Daily Buy volume: $8.6M -> $11.97M (+91%)
  • TVL: $28.6M -> $32.6 (+14%)
  • Highest key: 7.87 -> 8.69 (+10%)

The main event - total transaction volume came in at $18.5M. A new ATH by 10%.

Total users are now over 155,000 and total transaction volume is up to $170M.

Racer keys continue to leg up and seem destined to hit 10 ETH this week. And now there are 4 accounts over the 5 ETH level (meaning they've flipped MAYC), including Hsaka, Levi and Vombatus.

A few other anedcotal trends and developments:

  • Sports betting pro Haralabos Voulgaris and DraftKings co-founder Matt Kalish joined Friend Tech, with both of their keys immediately soaring to 1 ETH and 0.5 ETH respectively
  • Faze Banks soared past a 2 ETH floor after re-activating his account (settling at 1.5)
  • There are rumors of affiliate/referral links going live this week (also stemming from Faze)
  • Leaderboard accounts continue to grind up 10-20%+ 
  • There's a new way to use Friend Tech on desktop for those who want to get off the phone

And today looks to be another big day ahead of tomorrow's pivotal next points airdrop...

๐Ÿšš What else is happening in NFTs?

Here is the list of other notable headlines from the day in NFTs:

  • NFTs were mostly red again with top movers down 5-10% on the day led by BAYC (-5%) and Milady's down another 10%; Stoner Cats surprisingly led top movers
  • SugarTown Oras minted out their free PFP mint, with the floor jumping to 0.2 ETH in the first day of trading; 40% of the supply is still to come 
  • Nakamigos made the announcement that they're launching a new 20k PFP, at 0.05 ETH per mint for both holders and public; the floor tanked 50% on the news to 0.2 ETH
  • Yuga Labs unveiled "The Bodega," a new directory for all Made By Ape Licenses
  • Jack Butcher introduced a new dynamic into Opepens - numbered prints, with more info to come
  • DraftKings Reignmakers hit the #1 spot on the CryptoSlam daily NFT volume board after their Rush Primetime packs sold out instantly; they did $1.27M in sales and made up 83% of Polygon's NFT volume
  • OnChainMonkey Dimensions No. 215 sold for 4 BTC ($105,200), helping drive the overall OCM floor up 10% to 1.2

๐ŸŒŽ Around Crypto and Web3

A few other Crypto and Web3 headlines that caught my eye:

  • The crypto market was up on Wednesday; BTC +0.7%  at $26,330; ETH +1.4% at $1,620; SOL +3.4% at $18.80
  • Coinbase CEO Brian Armstrong confirmed that they will support Lightning in an effort to speed up Bitcoin payments, calling BTC "the most important aspect in crypto"
  • VeeFriends and Crocs are partnering for the upcoming Halloween Parade in New York, in Crocs latest web3 project collab

๐Ÿš€ NFT Total Volume

  • BAYC (2,2 86 ETH, 23.9 ETH Floor)
  • MAYC (915 ETH, 4.85 ETH)
  • DeGods (708 ETH, 3.43 ETH)
  • Milady (690 ETH, 2.18 ETH)
  • Sugartown Oras (670 ETH, 0.2 ETH)

๐Ÿ“ˆ NFT Floor Price Increase

  • Stoner Cats (290%, 0.0 ETH Floor)
  • Psych Anon Genesis (74%, 0.21 ETH)
  • Parallel Avatars (34%, 0.36 ETH)
  • Sproto Gremlins (16%, 0.75 ETH)
  • OnChainMonkey (12%, 1.2 ETH)

๐Ÿ—“ Upcoming NFT Mints and Reveals

Today is a lighter day of drop again focused in art, and a major Yuga AIP vote goes live (covered above).

Art Blocks is back with "Woman, Life, Freedom" by Armaghan Fatemi in what may be today's art highlight in a week that has seen some nice wins. The edition of 160 will be sold in a Dutch auction.

If you want more, see the full list of today's drops from Swizzy's daily mint monitor

  • Glorious x Gordon Walters - Te Whiti (11:00 a.m. ET)
  • Art Blocks Presents "Woman, Life, Freedom" (1:00 p.m. ET)
  • Machi's AIP Vote (9:00 p.m. ET)

Enjoy this write-up and/or want to sponsor the Morning Minute? Follow along with me on Twitter @tyler_did_it or reach out via email

For all volume and floor price data, see Lucky Trader's Project Rankings page.

For all upcoming mints, see Lucky Trader's NFT Calendar page.

Disclaimer: The author or members of the Lucky Trader staff may own NFTs discussed in this post. Furthermore, the information contained on this website or the Lucky Trader mobile application is not intended as, and shall not be understood or construed as financial advice. AI may have assisted in the creation of this content.