A good friend recently asked me to join their podcast to discuss the SEC’s new interpretation of specific digital assets. And in particular, how this might impact the U.S market’s ability to enable fan tokens, digital collectibles and digital assets more broadly.

It’s a show I’ve been on multiple times before, but this time I declined. Because my honest take is that not much changes.

Founders love to say that regulatory uncertainty harms their ability to build.

I’ll be clear - this is absolutely a barrier.

But the most important thing is having product-market fit. Demand. Something that retail consumers actually want, and specific to this newsletter, fans actually want.

Compliance doesn’t automatically mean your business will do well.

And whilst the SEC’s new interpretations are welcome and so overdue, I think it’s worth some introspection as an industry, rather than pinning all our hopes on mainstreaming into regulatory buckets.

Of course, on the other side of the coin, I have had multiple friends at multiple sports properties stopped from doing cool experiments using digital assets due to lawyers. It’s just now; it might be their commercial team stopping them instead.

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Last month, the SEC and CFTC issued joint interpretive guidance — Release 33-11412 — that set out the first formal taxonomy for how US securities laws apply to crypto assets.

It splits crypto assets into five categories:

Most of what I write about and analyse sits in categories II and III.

Category II — Digital Collectibles.

Assets "designed to be collected and/or used" whose value derives from "supply and demand, subject matter, popularity, and scarcity."

The release names CryptoPunks, Chromie Squiggles, Fan Tokens, and VCOIN as examples. Sports-moment NFTs (NBA Top Shot), athlete drops, and digital trading cards fall under this category by analogy, is the presumption.

Category III — Digital Tools.

Assets performing a "practical function" — membership, credential, ticket, identity badge — where value comes from "functional utility, not from expectation of profit from efforts of others." The release cites Ethereum Name Service domains and CoinDesk's Microcosms NFT Consensus Ticket. Tokenised tickets, club memberships, and onchain loyalty credentials sit here.

With regards to fan tokens for example, Chiliz responded, calling it a “watershed moment”

Their response called it a "watershed moment" and declared that American sports teams can now approach fan token programmes "with the same confidence their international counterparts have had for years."

Elsewhere, companies previously under the microscope, like Dapper Labs (creator of NBA Top Shots), may feel like the regulatory burden they have carried for so long has eased.

But fundamentally - has anything changed?

Compliance will help businesses dealmake with sports IP, but it won’t create demand for their products.

I cited Chiliz as an example because it implies that their model has been stopped from proliferating in the U.S.

Indeed, the Phoenix Suns and many NBA teams announced fan tokens in 2021, but from all the onchain research I’ve done - never made it to market. So technically, that is true; Chiliz couldn’t go to market because teams were unnerved by regulatory uncertainty. Zero fan tokens launched. The leagues’ restricted token issuance, the partnerships stayed marketing-only, and within two years, most had quietly lapsed.

But will the regulatory uncertainty going away create demand for a product that has not changed since 2021?

Just this week, a Chiliz subsidiary, SBI Chiliz, signed an MOU with J2 League side Tokyo Verdy to "mutually explore tokenisation of the club." The scope was familiar: fan tokens, fan voting, digital collectibles, engagement rewards, loyalty tiers, match-related quests.

The SEC releasing a 68-page taxonomy does not change this offering not having fan market fit. It just changes what you are legally allowed to sell to a market.

With fan tokens we have a 5 year data set on demand.

The top ten fan tokens by market cap have collectively erased 92-99% of their peak value, with Barcelona's $BAR token leading the damage at a 99.3% drawdown from $72.55 to $0.47.

If we broaden the lens to Dapper Labs, the SEC closed an investigation into the Top Shot creators in 2024.

18 months later, there are clear regulatory frameworks for ‘moments’ NFTs, as per the SEC and CFTC guidance.

NBA Top Shot, at its pomp, was a monster during COVID.

In February 2021, Top Shot did roughly $224M in monthly sales.

By September 2023, that had fallen to around $2M.

In 2025, Dapper Labs saw monthly volumes between $2-$6m, and in 2026, that is now between $1-2m in monthly volume.

Looking at the last 12-18 months, the volumes have remained fairly consistent. It’s not at all bad, in isolation. But it pales in comparison for a company that raised at a $7bn+ valuation.

Beyond raw volume, looking at transactions and active owners - there are fewer than 10,000 active ‘owners’ of Top Shot collectibles right now.

Sorare — onchain fantasy, the second most funded business in this sub industry, migrated from StarkEx to Solana in October 2025. Monthly sales volume fell to $2.7M in June 2025, the lowest level since 2021, as discussed in a recent edition of Sporting Crypto.

From well-sourced publications and onchain data up to the end of 2025, we can ascertain that these are the rough numbers they are looking at. 2024 and 2025 were consolidation years for the company that most recently raised at a $4.2BN valuation, and they are looking to make the business profitable before taking their next steps in their company lifecycle.

Club membership NFTs like Barca Pass fell to a collapsed vendor.

Tom Brady's Autograph platform pivoted completely away from digital memorabilia.

It’s difficult to point the finger at regulation.

The thing that everyone of these products has in common is that they have fallen alongside the crypto market in general.

But we have now seen that multiple crypto applications have product market fit agnostic of prices.

The decoupling from the wider crypto market cycle has finally happened.

Stablecoins settled $33 trillion in 2025 — up 72% year-on-year. Tether is the most profitable company on the planet. Stripe acquired Bridge for $1Bn+ and Mastercard have agreed to acquire stablecoin business BVNK for $1.8Bn.

Prediction markets have gone from $20M weekly volume in April 2024 to over $20 billion per month by early 2026. Polymarket monthly unique wallets have nearly tripled in six months to 840,000. The company is valued at $8bn+, with rumours they are trying to match Kalshi’s recent $22Bn valuation.

Hyperliquid now handles around $195B in monthly perpetuals volume and an estimated 66-73% of all decentralised perpetuals flow. Twenty-four-hour, no-downtime, fully onchain leverage trading. This is now regularly being hat tipped by Forbes and massive institutions.

In the land of onchain collectables, this is what the weekly gatch spending looks like since July 2024.

(1) Compliance is a lagging indicator of demand

This SEC guidance is welcome and overdue. It also legalises a set of products the market has already rejected on price. The 92-99% drawdown across the top ten fan tokens — and the 99% collapse in NBA Top Shot's monthly volume — happened while the US was still "off-limits." The US being off-limits was never the binding constraint. Fans were.

(2) Fan market fit is the unlock, not regulatory market fit

Supporters want access, belonging and recognition. Investors want a return. You cannot package both inside a volatile token and expect the fan relationship to survive the second one cannibalising the first.

(3) Decoupling price is the real signal here

If your business is totally reliant on crypto markets and crypto native users, then you will live and die by the volatility of these markets.

Decoupling shows you have created a real, sustainable business. Otherwise, you are reliant on the broader crypto market or stay niche.

(4) The blocker is your commercial team now

Lawyers used to be the thing stopping sports properties from experimenting in this domain.

Going forward, the brake is more likely to be the commercial team asking why they should launch a product with no market fit.

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