The US Securities and Exchange Commission is probing the developers of NFTs and their marketplaces to determine whether they comply with guidelines.
The agency wants to know if some NFTs are being used to raise funds similar to traditional securities against provisions.
The SEC’s Attorneys have been sending subpoenas to collect information on the digital asset offering in the past months.
The commission is also sourcing information about fractional NFTs, a concept of breaking down the assets into small pieces.
The news comes as the SEC continues to ramp up sector regulations. The agency fined BlockFi $100 million in February for not registering high-interest-bearing products.
NFTs have recorded exponential growth since last year, with an estimated $44 billion in crypto being sent to smart contracts on Ethereum in 2021 compared to $106 million the prior year.