The NFT market is experiencing a significant downturn as sales volume in September fell to its lowest level since January 2021. According to CryptoSlam data, total sales for the month reached just $296 million, marking a 20% decline from August’s $373 million. This sharp drop is even more staggering compared to March 2024, when NFT sales hit a high of $1.6 billion.

September also saw a steep decline in total transactions, with only 4.9 million recorded, a 32% drop from August’s 7.3 million. Despite the market’s overall slump, the average value of each NFT transaction increased by 18%, rising from $50.71 in August to $60 in September.

The NFT sector’s challenges come as the U.S. Securities and Exchange Commission (SEC) intensifies its scrutiny of the market. On August 28, OpenSea, a leading NFT marketplace, received a Wells notice from the SEC, suggesting some NFTs on the platform could be classified as unregistered securities. This was followed by a $750,000 fine issued to Flyfish Club, an NFT-themed restaurant, for selling NFTs that the SEC argues may breach securities laws.

However, industry leaders like Luca Schnetzler, CEO of the popular Pudgy Penguins NFT collection, remain unfazed. Schnetzler called the SEC’s actions “nonsense,” arguing that targeting OpenSea would require the regulator to also take action against major brands like Sotheby’s and Nike, which have embraced NFTs.

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