Most NFTs Are Not Securities

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Hester Pierce, the United States Securities and Exchange Commissioner, popularly known in the crypto space as “Crypto Mom,” continues advocating for agendas related to non-fungible tokens within the crypto regulatory commission. In her latest crypto push, the SEC commissioner has advocated that non-fungible tokens, especially those designed to compensate their digital art creators over time, should not be considered as securities.

In a May 19 blog post, Hester Pierce, the commissioner at the United States Securities and Exchange Commission, shared her thoughts on crypto and non-fungible token products. Before starting, Pierce has put a disclaimer that her views are her own as a commissioner and do not necessarily coincide with those of the Commission or her fellow Securities and Exchange Commissioners.

Here’s what the Crypto Task Force has been doing and some things we’re thinking about: https://t.co/YHXAYhr23P

— Hester Peirce (@HesterPeirce) May 19, 2025

Recent remarks from Hester Peirce, who is also the SEC Crypto Task Force lead, regarding non-fungible tokens have sparked significant interest in the crypto market, particularly among traders focusing on NFT-related tokens and blockchain platforms. According to the SEC Commissioner, not all non-fungible token collections are securities, advocating for a different approach when regulating these digital assets.

Crypto Mon asserts that many non-fungible tokens are not securities, including NFTs designed to compensate their creators over time. These NFTs are powered by smart contracts, which can be programmed to automatically transmit a portion of the sale price of an NFT to the creator of the artwork as a royalty each time it is resold. Just as streaming platforms pay royalties to the creator of a song or video each time a user plays it, an NFT can enable artists to benefit from the appreciation in the value of their work after its initial sale.

Pierce further argues that the “creator royalty” feature of certain NFTs does not provide the NFT owner rights or an interest in any business enterprise or “the kinds of profits traditionally associated with securities.” In crypto, “security” refers to both the security of the technology itself (like the blockchain) and the protection of digital assets and user information. A security token is a specific type of cryptocurrency that represents ownership or rights in a real-world asset, like shares in a company or real estate.

Pierce Pushes More NFT Agendas

Earlier this year, the United States Securities and Exchange Commission (SEC) held its first-ever roundtable meeting. During this meeting, led by then Acting SEC Chairperson Mark Uyeda, who assumed office following Gary Gensler’s resignation, Hester Peirce advocated that a crypto startup, which aspires to use non-fungible tokens as a fundraising mechanism to fund their work, should be exempted from the securities regulations. If she succeeds in exempting the majority of the NFTs from the Securities laws, there will be massive NFT adoption among creators, businesses and institutions.