According to the Daily Planet, U.S. SEC Commissioners Hester Peirce and Mark Uyeda objected to the SEC's enforcement action treating NFT sales as securities, in part because they disagreed with the application of the Howey test.
Specifically, the SEC does not have a sufficient basis to bring this into its jurisdiction. The several company and buyer statements cited in the order do not amount to promises that constitute investment contracts. Even if the NFT sales fully complied with the Howey regulations, this set of facts is not sufficient to warrant enforcement action.
Because this is the first enforcement action against NFTs, it raises many difficult questions. The SEC should have addressed these questions long ago and provided guidance as NFTs began to rapidly develop. Having a discussion about NFTs now can help the SEC deal with this issue wisely, such as: NFTs are not a single-use asset class, different NFTs have multiple use cases, and whether the SEC has an effective way to classify NFTs to think about whether and how securities laws apply to offers and sales.
Earlier news, the SEC accused Impact Theory, a Los Angeles-based media and entertainment company, of conducting an unregistered issuance of crypto asset securities in the form of NFTs, raising approximately US$30 million from hundreds of investors, including investors across the United States.