NFT Sales Decline In September Amid Regulatory Scrutiny

According to Cointelegraph, non-fungible token (NFT) sales continued to decline in September, with digital collectibles' monthly sales volumes failing to recover. Data from CryptoSlam shows that NFTs recorded $296 million in sales during September, marking a 20% decrease from August's sales volume of $373 million. This figure represents an 81% drop from the $1.6 billion in sales volume recorded in March, which was the strongest month for digital collectibles in 2024. Digital collectibles have not seen a monthly sales volume below $300 million since January 2021, when the monthly sales volume fell to $109 million. In addition to the decline in sales volume, total NFT transactions dropped 32% from 7.3 million in August to 4.9 million in September. Despite these negative statistics, the average value of NFT transactions increased by 18%, rising from $50.71 in August to $60 in September. The downward trend in the NFT space coincides with increased scrutiny from the United States Securities and Exchange Commission (SEC). On August 28, Devin Finzer, CEO of NFT marketplace OpenSea, reported that the company received a Wells notice from the SEC. Finzer claimed that the SEC alleged some NFTs on the platform might qualify as unregistered securities. On September 16, the SEC fined the NFT-themed restaurant Flyfish Club $750,000 for selling NFTs. SEC commissioners Hester Peirce and Mark Uyeda criticized this enforcement action, arguing that the NFTs sold by Flyfish should not trigger securities laws, as they were merely “a different way to sell memberships.” Despite the SEC's actions, Luca Schnetzler, CEO of the popular NFT collection Pudgy Penguins, dismissed the regulator's efforts as “nonsense.” In a previous interview with Cointelegraph, Schnetzler described the SEC's actions as a “nothing burger,” arguing that targeting OpenSea would necessitate going after larger organizations involved in NFTs, such as Sotheby’s, Nike, and Pokemon.