As reported by Cointelegraph, the market for non-fungible tokens (NFTs) experienced further declines in September, with monthly sales failing to bounce back. Data from CryptoSlam indicates that NFTs generated $296 million in sales during the month, representing a 20% drop from August’s total of $373 million. This marks a staggering 81% decrease from the peak of $1.6 billion reached in March, which had been the most successful month for digital collectibles in 2024.

Since January 2021, when monthly sales fell to $109 million, NFTs had not dipped below $300 million until now. Additionally, the number of NFT transactions plummeted by 32%, from 7.3 million in August to 4.9 million in September. However, despite the overall decline, the average transaction value for NFTs rose by 18%, increasing from $50.71 in August to $60 in September.

This ongoing downturn in the NFT sector aligns with heightened regulatory scrutiny from the U.S. Securities and Exchange Commission (SEC). On August 28, OpenSea’s CEO, Devin Finzer, revealed that the marketplace had received a Wells notice from the SEC, which suggested that certain NFTs on the platform could be classified as unregistered securities. Shortly after, on September 16, the SEC imposed a $750,000 fine on Flyfish Club, an NFT-themed restaurant, for selling NFTs. SEC commissioners Hester Peirce and Mark Uyeda criticized this action, asserting that the NFTs sold should not fall under securities regulations, as they were simply a novel way to offer memberships.

In response to the SEC’s moves, Luca Schnetzler, CEO of the well-known NFT collection Pudgy Penguins, dismissed the regulatory efforts as “nonsense.” In an earlier interview with Cointelegraph, he described the SEC’s actions as a “nothing burger,” contending that if the agency pursued OpenSea, it would also need to target larger entities involved in NFTs, including Sotheby’s, Nike, and Pokemon.