Preston Byrne was quoted October 15 in a Decrypt article entitled, Solana NFT Projects Cancel Holder Royalties After FTX US Launch.”
It’s common for NFT creators to earn royalties from secondary market sales, and Preston Byrne—a partner at law firm Anderson Kill—told Decrypt that such models should not run afoul of securities laws.
“In that case, the creator would not be selling a collectible, but rather would be selling an income stream,” said Byrne. “To the extent that such sale is an investment of money in a common enterprise which creates an expectation of profits, this could be deemed a security by the SEC. If that were the case, it would only be tradable by the public on a national securities exchange.”
“FTX US might be more sensitive to this issue than other marketplaces, due to the fact that it operates more closely to the edge of the SEC's regulatory perimeter than a platform like OpenSea does,” Byrne suggested.
Read the full Decrypt article here.