SEC considering enforcement action against NFT platform Opensea

• OpenSea has received a Wells Notice from the SEC as the commission believes NFTs to be securities
• The platform’s head has claimed that it would oppose this claim and has pledged millions to cover artists legal costs

OpeanSea, a leading NFT marketplace, seems to have drawn the attention of the US Securities and Exchanges Commission (SEC). According to a statement released by the firm’s top head, the most infamous regulator in the crypto space has sent a Wells Notice to OpenSea.

Earlier today, co-founder and CEO Devin Finzer took to X stating, “We’re shocked the SEC would make such a sweeping move against creators and artists. But we’re ready to stand up and fight.”

He further added that, “Cryptocurrencies have long been in the crosshairs of the SEC, and companies like @coinbase, @Uniswap, @RobinhoodApp, @krakenfx, and @Consensys  have been fighting against the SEC’s single-track approach of “regulation by enforcement.”

NFTs: To be securities or not to be securities?

A wells notice is a formal notice issued by the SEC expressing its intention of the bringing a legal action against the firm. In this particular case, the commission is alleging that the firm has breached securities law as they consider NFTs on OpenSea to be securities in nature.

However, OpenSea’s chief argued that they are “are fundamentally creative goods: art, collectibles, video game items, domain names, event tickets, and more.” He further asserted that d”digital art” should not be put in the same platter as “collateralized debt obligations”.

The CEO further expressed the firm’s stern opposition against SEC’s move and claimed that it would pledge $5 million to cover the legal costs of NFT creators and devs who could receive a Wells notice.

The SEC, on the other hand, continues to charge against crypto firms in full force despite its defeat against Ripple, a digital asset infrastructure provided that spearheads XRPs development. Prior to shifting its attention to OpenSea, the SEC had charged Novatech, its founders and promoters for defrauding the Haitian community.

It also charged BitClout Founder for defrauding investors by selling unregistered securities in the form of BTCLT token. The commission claimed that the money taken from the investors was misused by the founder for personal benefit. And, with these back to back legal actions, it does not seem like the SEC would be taking a break from the crypto space.