Film producers and singers sue SEC for excessive regulation of NFTs: Are Taylor Swift concert tickets considered securities?

Court documents indicate that film producer Brian Frye and songwriter Jonathan Mann have jointly filed a lawsuit against the U.S. Securities and Exchange Commission (SEC) to clarify whether NFTs fall within the agency's jurisdiction, citing Taylor Swift's concert tickets as an example.

Two Individuals Sue SEC: Do You Need to Register with the SEC to Sell NFTs?

Brian Frye and Jonathan Mann confirmed this early this morning via social media platform X, emphasizing that the SEC's actions have threatened the work of artists and creators.

For years, I have believed that the SEC is abusing its authority, so I have sued the SEC in the Federal Court of Louisiana to confirm that the commissionhas no authority to regulate the sale of NFT artwork.

They wrote in court documents released on the 29th that artists nationwide are facing intimidation from the SEC for selling their visual or music artwork without registering it as securities:

Whether it is a renowned artist or a young aspiring talent, they are suddenly faced with a strange question: "Do they need to hire a securities lawyer to sell their artwork?"

They further added, "They are just trying out a new and rapidly developing technology and choosing it as their medium of expression."

It is reported that the two individuals are seeking clarification from the court on the following two questions to prevent innocent artists from being persecuted:

• Do artists need to "register" before selling NFT artwork?

• Must artists disclose the "risks" of purchasing their NFT artwork publicly?

Are Taylor Swift Concert Tickets Considered Securities?

Meanwhile, the lawyers of the two individuals compared NFTs to concert tickets of famous singer Taylor Swift, arguing that considering NFTs as securities is absurd:

Imagine if Taylor Swift were to release songs, collectibles, or concert tickets in NFT form, and the SEC ordered them to be destroyed. This sounds far-fetched, but this is exactly what happened with Impact Theory and Stoner Cats.

They added, "Would Swift herself promoting a concert or releasing a new song to boost her ecosystem fall into the securities category?"

A few weeks ago, SEC's crypto-friendly commissioner Hester Peirce criticized the Commission's arbitrary ruling on Stoner Cats, stating that the logic behind the allegations could apply to all non-digital collectibles.

Review of SEC's Enforcement Record on NFTs

Last August, the SEC filed its first NFT investment contract lawsuit against media entertainment company Impact Theory, claiming that investors could expect profits from their issued Founders Key NFT, resulting in a fine of $6.1 million.

The following month, animation production company Stoner Cats was also accused of its Stoner Cats 2 NFT being an unregistered security, fined $1 million, and required to destroy all its NFTs.

SEC Strikes Again on NFTs - How is Stoner Cats voiced by Vitalik different from Star Wars collectibles?

It is reported that the SEC conducted a total of 784 enforcement actions last year, resulting in nearly $5 billion in fines, with the crypto sector being heavily focused on crypto fraud schemes, unregistered crypto asset products, platforms, and intermediaries.