Should Bored Apes or other NFTs be regulated as securities?
Bored Apes look a lot like baseball cards. But regulators — particularly at the Securities and Exchange Commission — are making a strained case to the contrary. Should a Bored Ape be considered a security akin to stock in Apple or Microsoft? TL;DR? No! Winston Churchill, anticipating Securities and Exchange Commission Chair Gary Gensler, once called out “this world of sin and woe.” Let us now add to the litany of woe the possibility that Bored Apes, CryptoPunks and many other nonfungible tokens (NFTs) might be considered securities . There are even some pro-crypto people out there who would welcome treating NFTs as securities. They are, as we here argue, flat wrong as to most (but not all) NFTs for reasons both operational and legal. As two of our colleagues wrote in The National Interest almost a year ago, “Typical non-fungible tokens (NFTs) are no more securities than baseball cards. Some high-profile investors, such as Canadian entrepreneur Kevin O’Leary, are on record as seeing b