Vinyl Group, Australia’s only listed music company, has acquired the assets of London-based Serenade, a platform focused on digital and physical collectibles, in an equity-based deal valued at up to US$1.6 million. 

Vinyl launched its website last year, aiming to replicate the experience of “crate-digging” for records in digital form, CEO Josh Simons told Decrypt. The acquisition marks the group’s expansion into the UK and European markets while enhancing its offerings in the digital collectibles space. 

“The plan was always to expand Vinyl.com’s offering to include music merchandise, digital collectibles, and experiences that connect fans with creators, and the acquisition of Serenade was the next step in that process,” Simons said.

Under the terms of the deal, Vinyl has made an upfront payment of $553,000 in shares, with an additional $1 million in shares contingent upon revenue and earnings targets.

The deal was finalized over the weekend, with Vinyl notifying Serenade that due diligence requirements had been successfully met. Vinyl’s share price jumped more than 8% on the ASX on Sunday following the announcement, rising to a three-week high above $0.06.

The performance-related earn-out requires the combined business of Vinyl.com and Serenade to achieve $2.76 million in revenue and $345,000 in earnings before interest and taxes within 12 months of the acquisition.

Serenade, which operates a marketplace for both physical and digital collectibles, has previously supported over 200 global artists, including high-profile names such as Liam and Noel Gallagher, Muse, and Sum 41.

The company also has partnerships with major record labels, including Warner Music Group and Beggars Group.

Serenade operates on the Polygon blockchain, a layer-2 scaling solution for Ethereum. Its key product, NFC-enabled digital “Smart Formats” built atop Polygon’s infrastructure, has seen 56% month-on-month sales growth since its launch in January, the company claims.

NFC-enabled digital Smart Formats are physical collectibles embedded with Near Field Communication technology that link to a digital asset or experience, typically hosted on a blockchain. 

These formats allow users to access digital content, such as music, exclusive videos, or digital artwork, by interacting with the physical item through their smartphone or other NFC-enabled devices.

Serenade CEO Max Shand will join Vinyl Group under a full-time employment agreement. Shand will receive five million options, vesting in stages upon achieving specific performance goals as part of his incentive package.

The Digital Chamber has called on the United States Congress to pass laws to protect non-fungible tokens (NFTs) from the overreaching Securities and Exchange Commission (SEC). The group wants lawmakers to classify NFTs as consumer products rather than securities. The SEC and other regulators have taken a tighter stance on the crypto market citing the need to protect investors. 

Digital Chamber Backs NFT Laws 

Crypto advocacy group, The Digital Chamber has called on United States lawmakers to pass laws to protect NFTs. In a recent statement, the association wrote that digital collectibles should be treated as consumer products making the sector exempt from federal securities laws. 

The @SECGov’s overreach is putting the livelihoods of NFT creators and communities at risk. NFTs are primarily consumer goods—not securities. We need Congress to take action now and protect innovation, creators, and consumer rights. https://t.co/dp1fb2R3cf

— The Digital Chamber (@DigitalChamber) September 10, 2024

This would place NFTs out of the reach of the SEC which continued to double down on its hostile approach to the market. According to the release, the laws should define NFTs for consumer use rather than financial products like securities. 

“Congress must act now to ensure that this burgeoning industry remains within the US, for the benefit of the US economy, and not move overseas to more favorable regulatory environments. The Digital Chamber strongly encourages Congress to clarify that Consumptive-Use NFTs are consumer goods and not financial products.”

This comes after the SEC issued a Wells Notice on NFT trading platform OpenSea. Crypto users and market commentators lashed out at the Commission terming it a move that could hinder market innovation. The securities regulator has issued Wells Notices on several crypto firms this year. 

Users Anticipate Clear Rules 

Digital asset users await clear rules to guide market policies against the present enforcement approach. The lack of rule masking in the United States has led to the migration of talent and a proliferation of lawsuits by the SEC. Recently, Coinbase stock plummeted as the court sided with the SEC on the confidentiality of a document.

The upcoming United States elections are another positive on crypto regulation as the sector becomes a mainstream issue. In addition to this, some crypto bills made progress in Congress ahead of the polls. 

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David Pokima

David is a finance news contributor with 4 years of experience in Blockchain Technology and Cryptocurrencies. He is interested in learning about emerging technologies and has an eye for breaking news. Staying updated with trends, David reported in several niches including regulation, partnerships, crypto assets, stocks, NFTs, etc. Away from the financial markets, David goes cycling and horse riding.

Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.