The cryptocurrency markets felt a reduction in SEC pressure amid the upcoming elections, but it hasn’t ended. SEC continues its cryptocurrency lawsuits. According to a recent announcement, the SEC has now sent a Wells notice to OpenSea. This means that after the precedent-setting case in the NFT field, one of the largest NFT platforms is now being targeted.
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NFTs, which gained popularity in 2021, have been experiencing base price drops due to long-term disinterest. Now, with the Wells notice sent by the SEC, NFTs, like altcoins, will have to defend themselves in court as investment contracts and securities. OpenSea CEO Devin Finzer wrote:
“OpenSea received a Wells notice from the SEC, threatening to sue us because they believe the NFTs on our platform are securities.
We are very surprised by the SEC’s comprehensive move against content creators and artists. However, we are ready to stand up and fight.
Kraken, Robinhood, Uniswap, and others are fighting against the SEC’s one-sided approach of ‘regulation by enforcement.’
However, this is a move towards uncharted territory. By targeting NFTs, the SEC will stifle innovation on a broader scale: hundreds of thousands of online artists and content creators are at risk, and many do not have the resources to defend themselves.
NFTs are fundamentally creative products: art, collectibles, video game items, domain names, event tickets, and more. We should not regulate digital art in the same way we regulate collateralized debt obligations.
In addition to standing our ground, we are donating $5 million to help cover the legal expenses of NFT content creators and developers who receive Wells notices. Every content creator, big or small, should be able to innovate without fear.
I hope the SEC will come to its senses soon and listen to us with an open mind. Until then, we will stand up and fight for our industry.”
What is a Wells notice? This notice reflects the SEC’s intention to sue the relevant company and is the final step before the lawsuit.
