EddieJayonCrypto
17 Sep 24
SEC Commissioners Hester Peirce and Mark Uyeda criticized the SEC for its handling of a case involving Flyfish Club, LLC, a high-end restaurant chain that sold NFTs to provide exclusive access to a yet-to-be-built restaurant and bar. The SEC recently settled with Flyfish Club, requiring them to dest...
SEC Commissioners Hester Peirce and Mark Uyeda have criticized the Securities and Exchange Commission (SEC) for its handling of a case involving Flyfish Club, LLC, a high-end restaurant chain that sold NFTs to provide exclusive access to a yet-to-be-built restaurant and bar. The dissenting commissioners argued that the SEC's application of securities law to NFTs was overzealous and unnecessary, stating that the NFTs were simply a different way to sell memberships and did not involve fraud.
Flyfish Club has settled with the SEC, agreeing to destroy all NFTs, pay a civil penalty of $750,000, and stop collecting royalties from NFT sales on secondary markets. The project was backed by prominent online entrepreneur Gary Vaynerchuk, and the chain is set to open its first restaurant in New York’s wealthy Upper East Side later this week. Flyfish created approximately 3,000 NFTs ahead of the launch, generating total proceeds of $14.8 million from the sales.
The SEC’s recent judgment did not allege fraud but stated that Flyfish Club failed to register their NFT collection as securities. Commissioners Peirce and Uyeda criticized the SEC's overzealous application of securities law to NFTs, emphasizing support for creative individuals, such as chefs or artists, to profit from their work and dismissing such experiments as a threat to American investors.