On Wednesday, OpenSea, the largest marketplace for non-fungible tokens (NFTs), received a Wells notice from the U.S. Securities and Exchange Commission (SEC), indicating the regulator’s intent to take potential legal action, asserting that NFTs traded on the platform could be classified as securities.
CEO Devin Finzer Responds to SEC Notice
Devin Finzer, CEO of OpenSea It was announced Finzer broke the news in a post on X (formerly Twitter), expressing his shock at the SEC’s decision. Finzer emphasized the impact this move could have on creators and artists, saying, “We are ready to stand up and fight.”
The SEC has long been monitoring the cryptocurrency and digital asset landscape, targeting various companies, including Coinbase, Uniswap, and Kraken, for perceived regulatory violations.
Finzer has criticized the SEC’s regulation-through-enforcement approach, arguing that it stifles innovation and imposes risks on “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 pointed to a lawsuit filed against the U.S. Securities and Exchange Commission by musician Songdaeman and conceptual artist Brian L. Frey, who fear their creative works could be classified as unregistered securities offerings.
According to Finzer, this legal ambiguity could put the livelihoods of many NFT creators at risk. Finzer also noted:
NFTs are essentially creative commodities: 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 set aside $5 million to support legal fees for NFT creators and developers who receive Wells’ notices, reinforcing their position that every creator, regardless of size, should be able to innovate without fear of regulatory repercussions.
Featured image by DALL-E, chart by TradingView.com