OpenCy said it received a Wells notice from the SEC. 'They believe the NFTs on our platform are securities,' said CEO Devin Finzer. The crypto community was shocked by the potential case.
OpenSea, one of the world's largest marketplaces for NFTs, Said Wednesday was subject to pending litigation from the US Securities and Exchange Commission.
“OpenSea has received a Wells notice from the SEC because they believe the NFTs on our platform are securities,” said co-founder and CEO Devin Finzer. wrote that On X.
The agency may be willing to ensure openness to the sale on its site of certain NFTs registered as securities under the same laws governing stocks and bonds.
That's in line with lawsuits filed by the SEC against Coinbase, Binance, and Kraken.
Rushing action
Wells sends notices to targets of SEC investigations, and they usually indicate that the agency is about to file an enforcement action.
A spokeswoman for the SEC said the agency does not comment on “the existence or non-existence of a possible investigation.”
The development is the latest in the securities regulator's three-year campaign for regulation in the crypto industry.
In April, Uniswap Labs, the company behind the unnamed decentralized exchange, said it had received Wells' notice that the SEC was ready to file its first lawsuit against a major player in decentralized finance.
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The SEC did not sue the company.
Last year, the SEC sued NFT issuers Impact Theory and Stoner Cats 2. Allegedly, their NFT sales are similar to stock market debuts of traditional companies.
The companies settled and agreed to pay millions in fines and destroy any NFTs still in their possession.
Two artists
Two artists who released their work as NFTs filed a preliminary lawsuit against the agency in July, saying they face a “real threat that the SEC will bring an enforcement suit” if they continue to sell the artwork without their permission.
“This Wells notice against OpenC is precisely why we filed our declaratory judgment action against the SEC,” said Brian Fry, one of the artists suing the SEC. News on wednesday
His co-plaintiff, musician Jonathan Mann, echoed the sentiment.
“Suing Occupy is like suing eBay for selling trading cards or Sotheby's for selling art,” he said. News. “This shows that the SEC's only rubric for determining whether something is a security is: 'Is it on the blockchain?'”
OpenSea said it will set aside $5 million to cover the legal fees of any NFT artists or developers who receive Wells' notice.
Alex Gilbert News'Diffie correspondent from New York. You can reach him at [email protected].
Related TopicsOpenCFSecurities and Exchange Commission (SEC)