In this week's newsletter, read about Galaxy Digital using a non-fungible token (NFT) of a historic violin to secure a loan and how NFT sales volume dropped in May. Check out what the US Treasury has to say about NFTs and how Bitcoin NFTs have reached a new stage. In other news, Dapper Labs CEO Roham Gharegozlou claims NFTs are not securities after reaching settlement in NBA Top Shot Moments lawsuit.
Galaxy Digital uses a historic violin NFT to secure the loan
Yat Siu, co-founder of Galaxy Digital and Michael Novogratz's Animoca Brands, tokenized a 300-year-old violin as collateral for a loan. Galaxy loaned Siu an undisclosed amount, and to secure the loan, the Animoca CEO used an NFT of a historic Stradivarius violin and physical assets as collateral.
The violin was owned by the Russian Empress Catherine the Great. Musical instrument auction house Tarisio traced the origins of the violin back more than 300 years. Siu acquired the violin at auction in 2023 for $9 million.
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NFT sales volume plummets 54% in May: CryptoSlam
NFT sales showed a decline in May despite a recent spike in April. According to CryptoSlam, sales of NFTs reached more than $1 billion in April. However, volume fell to $624 million in May, registering a 54% decline month-on-month.
Bitcoin-based NFTs posted a 68% drop in sales in May. Other top NFT chains, such as Solana and Ethereum, have also recorded downward trends. Solana-based collectibles were down 48%, while Ethereum NFTs were down 55%.
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A US Treasury report outlines the potential financial risks of NFTs
The US Treasury Department has released a risk assessment of NFTs to provide insight to regulators. The ministry highlighted several security concerns, including the possibility of terrorists financing operations using non-fungible tokens (NFTs).
Aside from financing terrorism, the Treasury Department also said that NFTs could be used by government entities to finance nuclear proliferation and money laundering. Furthermore, the government agency said there are risks to investors who may be exposed to carpet recalls and theft.
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Bitcoin NFTs have all-time sales of $4 billion
NFTs based on the Bitcoin blockchain have recorded an unprecedented sales volume of $4 billion. NFT tracker CryptoSlam data on June 4 showed that Bitcoin-based NFTs generated a record volume of $3.97 billion and a wash volume of $82 million.
Bitcoin-based digital collectibles also recorded a sales volume of $171 million, occupying first place in the last 30 days. Meanwhile, sales of Ethereum-based collectibles reached just $159 million last month.
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Dapper Labs' $4M Settlement Reaffirms That NBA NFTs Are Not Securities: CEO
Dapper Labs, the company behind the NBA Top Shot Moments NFTs, has entered into a $4 million agreement to end a class-action lawsuit, which alleged that the NFTs were sold as unregistered securities.
The company's CEO, Roham Garegozlou, claimed that the case found that NFTs on a decentralized public network are not securities “in the same way that trading cards are not securities.”
The settlement agreement showed that Dapper Labs agreed to pay $4 million if the plaintiffs stopped claiming that the NFTs were securities. It also ensures that the Flow blockchain will be sufficiently decentralized and away from corporate control.
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Thank you for reading this summary of the week's most notable developments in the NFT space. Come back next Wednesday for more reports and insights into this actively evolving space.
