A federal judge in New Orleans has dismissed a lawsuit by two NFT creators aiming to block potential enforcement by the U.S. Securities and Exchange Commission (SEC).
U.S. District Judge Greg Guidry ruled that the concerns raised by singer-songwriter Jonathan Mann and conceptual artist and law professor Bryan Frye were largely hypothetical. The pair argued that their NFT sales could be treated as unregistered securities, potentially exposing them to regulatory action.
“The SEC’s future regulation of NFTs is far from resolved,” Guidry noted, highlighting the absence of clear guidance for creators navigating this rapidly evolving digital landscape.
NFTs, digital assets recorded on blockchains, have sparked questions about intellectual property and financial regulation, especially as artists explore music, video, and visual art through this medium. The case follows high-profile SEC enforcement, including a $1 million settlement in 2023 with the creator of the Stoner Cats animated series over NFT-based digital tickets, a move that drew calls from regulators for clearer guidance for creators.
Mann and Frye, active NFT sellers since 2018, argued that ambiguous SEC rules threatened the livelihoods of artists experimenting with the technology. But Guidry concluded that prior SEC actions unrelated to the plaintiffs did not constitute a final agency decision and therefore could not justify preemptive legal action.
The ruling leaves the SEC free to pursue enforcement in future NFT cases without interference from Mann and Frye’s lawsuit, while creators continue navigating a gray area of digital asset regulation.
