Only one presenter or panelist appeared to utter the U.S. Securities and Exchange Commission's three-letter acronym during this year’s NFC Lisbon event last week.

“We are obviously aware of the litigation advanced against Binance and Coinbase in the U.S. from the SEC,” The Sandbox COO Borget said during a brief press event in the famed Carlos Lopes Pavillion in the Portuguese capital.

Built in 1932, the palace-esque venue would play host to NFT collectors, Web3-powered raves, and even one of H.R. Giger's original "Alien" sculptures for three days.

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Despite the event's distance from Washington D.C., where the SEC is based, Borget's comments made sense.

Just a few days prior, the token powering The Sandbox’s metaverse game was labeled an unregistered security in the SEC’s actions against both Binance and Coinbase. It wasn’t the only metaverse token to fall into the same bucket, either.

Axie Infinity (AXS), Chiliz (CHZ), and Flow (FLOW) were also included. When announced earlier this month, the news shook the crypto markets, plummeting listed tokens and sowing doubt into the future of the industry at large.

After all, both exchanges host upwards of $10 billion of trading volume a day, per CoinGecko. But curiously, at NFC Lisbon, Borget’s was one of the only formal acknowledgments of what many have called the most drastic crypto crackdown yet.

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But why?

“The NFT collector and artist do not heavily rely on Binance or Coinbase. They most likely only use it for on- and off-ramping. The dependencies on the NFT market are therefore rather low,” theMiracle CEO and co-founder Danilo Cerullo told Decrypt. “While Binance and Coinbase are well-known cryptocurrency exchanges, honestly, I don’t know anyone using their NFT marketplaces. There are numerous other platforms and marketplaces that cater specifically to NFT trading.”

He’s not wrong. Since its launch, Coinbase’s offering has seen very little traction among collectors and artists, posting barely $4,000 in trading volume over the past 24 hours, per Dune.

For context, Blur, the industry’s current heavyweight marketplace, has posted $2.3 million over the past day, followed by OpenSea, which recorded $651,000.

“Coinbase tried with their NFT marketplace, but it was a pretty big flop,” Zerion’s Head of Growth Alexander Guy told Decrypt. “Binance has an ecosystem, but it's pretty contained. If you want to get into NFTs as a builder or collector, you really need to be self-custodial.”

Guy added that non-custodial wallets (including Zerion) are typically preferred by traders. Self-custodial refers to storing your cryptocurrencies and tokens in your own controlled wallet, including so-called cold wallets like a Ledger or Trezor. Such wallets aren’t connected to the Internet and are thus less vulnerable to hacks or asset freezes, which can happen on exchanges.

The SEC’s actions are also limited to American soil, with European crypto enthusiasts hardly being affected by the news.

“SEC actions seem contained to the U.S. but it came up in a few conversations with businesses looking to operate in the U.S.,” Paulin Byusa, founder and CEO of Avenir, which provides dollar on- and off-ramps for EU-based businesses. “Otherwise, it felt like a distant issue for EU-focused users and businesses.”

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Instead of a fierce crackdown on crypto businesses, the EU has gone in a much different direction, arguably taking the regulatory lead in the crypto race.

Janet Ho, Chainalysis’ head of policy in Europe, called the incoming Markets in Crypto Assets (MiCA) framework a gold standard for rules, while the SEC’s own Commissioner Hester Peirce defined it as a “model” for similar policies stateside.

Besides both Coinbase and Binance finding little traction in the niche, or EU’s more optimistic crypto approach, the NFT space is also rife with artists and creatives rather than hardcore speculators.

“The NFT bubble is a bit different—a lot of artists, creators, gaming, and startups that might not be as deeply interested in regulatory news, especially in a foreign region,” Rebekka Revel, co-founder of NFT Club Berlin and SuperTeam Germany, told Decrypt.

When asked whether it was because NFC Lisbon was primarily focused on artists and collectors or because no one in Lisbon cares about the SEC, Borget told Decrypt that the “digital nation” The Sandbox is building only has 20% of its user base in the U.S. Nearly all the rest are spread across Asia (40%) and Europe (30%).

“It’s not about ‘caring about the SEC.’ The SEC is trying to protect users,” he said. “We don’t agree on certain aspects of this litigation, and we are not the ones that the SEC targets.”

Perhaps that’s ultimately the key.

Just as NFC Lisbon attendees were unfazed by the SEC’s actions earlier that week, opting instead to dive deeper into a digital world hosted by the city, the Commission may share the same sentiment towards jpeg collectors.

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It's not the art they're after, but those pesky unregistered securities.

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