Stocks & NFTs
NFTs, or non-fungible tokens, have exploded in popularity over the past few years, but along with the hype has come legal confusion. The central question many are now asking is simple: are NFTs securities? The short answer is sometimes yes. Whether an NFT is legally treated like a security depends on how it’s structured, sold, and marketed to buyers.
In 2025, this issue is more relevant than ever. Regulators, especially the U.S. Securities and Exchange Commission (SEC), are watching closely. If you’re just entering the NFT world, understanding how NFTs connect with securities laws is crucial, whether you're creating, selling, or collecting these digital assets.
NFTs are digital assets that represent ownership of a unique item recorded on a blockchain. They might be artwork, music, videos, gaming items, event tickets, or membership credentials. Unlike cryptocurrencies such as Bitcoin or Ethereum, NFTs are not interchangeable, and each one is unique.
You’ve likely heard of Bored Ape Yacht Club, a project that turned NFTs into cultural status symbols and tradable digital assets. Others, like NBA Top Shot, took sports highlights and packaged them as digital collectibles. These examples show how NFTs can operate as both creative content and financial products, raising questions about their legal classification.
A security is a financial asset that can be traded and includes things like stocks, bonds, and investment contracts. In the United States, whether something qualifies as a security is often determined by the Howey Test, which includes four factors used by courts.
This is important because if an NFT is considered a security, it must follow securities regulations. That means proper disclosures, SEC registration, and full compliance with federal law. Skipping those steps can lead to enforcement actions, fines, or even lawsuits. Since NFTs are often bought and sold like speculative digital assets, understanding these legal boundaries is critical.
Some NFTs are securities, but most are not. The key factor is whether the NFT is sold with the intent of providing an investment return that depends on someone else’s work.
For example, if you buy an NFT that simply showcases a digital artwork, with no talk of future profits, that’s unlikely to be a security. On the other hand, if an NFT project promises holders passive income, resale profits, or access to future token airdrops, it may fall into securities territory. The way these digital assets are marketed plays a big role in their legal treatment.
The Howey Test is a legal framework used to determine if something is a security. It includes four questions:
If the answer to all four is yes, the NFT could be considered a security. Let’s say a project says, “Buy our NFT and earn a cut of future platform revenue.” That language sets up a profit expectation and shows dependence on the project team’s success. These are the types of digital assets that could attract regulatory scrutiny.
A notable example is Impact Theory, a media company that sold NFTs in 2023 while promising financial benefits as their brand grew. The SEC argued these were unregistered securities and took enforcement action.
Other red flags include:
Even when NFTs are presented as digital collectibles, if the language around them suggests profit or investment, regulators may treat them as securities.
Most NFTs that focus on utility, creativity, or access do not fall under securities laws. These types of digital assets are common in gaming, art, and event access.
Examples include:
If an NFT gives the buyer something to use or enjoy without financial expectation, it’s typically not a security. These forms of digital assets still offer ownership or access, but they do not trigger the same legal requirements.
The SEC has increased its focus on NFTs and securities regulation in 2025. Chair Gary Gensler and the agency have stated that NFTs marketed as investments must follow existing financial laws.
After the Impact Theory case, more projects have come under review. One high-profile example is Dapper Labs and their NBA Top Shot Moments, where the SEC is evaluating whether these digital collectibles were actually sold as investment contracts.
In April 2025, the SEC released updated guidelines specific to digital assets, including NFTs. These guidelines urge creators to avoid speculative marketing and recommend platforms use compliance tools to screen risky projects.
The main takeaway is clear. If you are selling NFTs as a way for people to make money, especially through future growth or community profits, you might be subject to enforcement. Digital assets that blur the line between art and investment are being watched carefully.
Creators should avoid language that makes NFTs sound like a financial investment. Avoid phrases like “guaranteed floor price” or “share in platform profits.” Instead, highlight the experience, art, or access tied to the token.
Buyers should ask: Am I buying this NFT for enjoyment, or because I expect to make money later? If the appeal is strictly financial, the project may already be pushing into gray territory. When digital assets are promoted with hype and financial gain in mind, caution is advised.
Creators who violate securities rules can be fined, forced to refund buyers, or banned from major platforms. It’s important for both creators and buyers to understand the legal limits around digital assets in 2025.
The answer depends entirely on how the NFT is sold and what expectations are created. Some NFTs are simply access tokens or art pieces. Others are marketed like investment products. Only those that meet all parts of the Howey Test will be treated as securities.
With digital assets now in the spotlight, creators and buyers must pay attention to how NFTs are positioned. The SEC’s actions show that even small projects can be investigated if they cross the line, which is crazy! Whether you're minting or collecting, understanding how digital assets fit into legal frameworks is more important than ever, especially if you are the creator.
