- The U.S. securities regulator, the SEC, has issued a Wells notice to OpenSea, the largest NFT marketplace.
- OpenSea co-founder Devin Finzer says the NFT platform will fight any lawsuit brought by the SEC.
In a blog post on August 28, OpenSea said the SEC’s Wells notice indicates the agency — long criticized for its enforcement approach in the crypto sector — is considering a lawsuit against the NFT marketplace.
A potential SEC lawsuit against OpenSea would join a string of high-profile enforcement actions, including cases involving Uniswap, Robinhood and crypto exchanges such as Kraken, Binance and Coinbase. This week the SEC also charged Abra over its Earn program.
SEC venturing into uncharted territory, OpenSea says
As the SEC has intensified its regulatory scrutiny of cryptocurrencies in recent months, OpenSea says treating “collectibles, digital art, and in-game items” as securities would mark a new and troubling development.
“By targeting NFTs, the SEC is entering uncharted territory with potentially harmful consequences for consumers, creators and entrepreneurs alike,” OpenSea wrote in its blog post. Co‑founder and CEO Devin Finzer expressed similar concerns on X (formerly Twitter).
Finzer called the SEC’s move “shocking,” but said the company is prepared “to stand up and fight.”
OpenSea has received a Wells notice from the SEC threatening to sue us because they believe NFTs on our platform are securities.
We’re shocked the SEC would make such a sweeping move against creators and artists. But we’re ready to stand up and fight.
Cryptocurrencies have long…
— Devin Finzer (dfinzer.eth) (@dfinzer) August 28, 2024
OpenSea maintains that non-fungible tokens are fundamentally creative works — digital art and collectibles that should not be regulated in the same way as backed securities or debt instruments.
“We are not only defending our position, we are also dedicating $5 million to cover legal costs for NFT creators and developers who receive Wells notices,” Finzer said. “Every developer, large or small, should be able to innovate without fear.”