On Wednesday, OpenSea, the largest non-fungible token (NFT) marketplace, received a Wells notice from the U.S. Securities and Exchange Commission (SEC), indicating the regulator’s intention to potentially take legal action, stating that NFTs traded on the platform can be classified as securities.
CEO Devin Finzer responds to SEC notice on Wells
Devin Finzer, CEO of OpenSea announced Finzer shared the news in a post on X (formerly Twitter), where he expressed his shock at the SEC’s decision. Finzer emphasized the impact this move could have on creators and artists, noting, “We are ready to stand up and fight.”
The SEC has long been scrutinizing the cryptocurrency and digital asset landscape, targeting several companies including Coinbase, Uniswap and Kraken for alleged regulatory violations.
Finzer criticized the SEC’s enforcement-based approach to regulation, arguing that it stifles innovation and poses risks to “hundreds of thousands” of artists and creators who lack the resources to navigate complex legal battles.
OpenSea pledges $5 million to support creators
Finzer also referred to a lawsuit filed against the SEC by musician “Songadaymann” and conceptual artist Brian L. Frye, who fear their creative works could be classified as unregistered securities offerings.
According to Finzer, this legal uncertainty could jeopardize the livelihood of many creators in the NFT space. Finzer further noted:
NFTs are fundamentally creative goods: art, collectibles, video game items, domain names, event tickets, and more. We shouldn’t regulate digital art the same way we regulate collateralized debt obligations.
In response to the SEC’s actions, OpenSea has committed $5 million to support the legal fees of NFT creators and developers who receive Wells notices, reinforcing its stance that every creator, regardless of scale, should be able to innovate without fear of regulatory repercussions.
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