OpenSea was sent a Wells notification by the Securities and Exchange Commission about the NFTs traded and purchased on its platform.
In a recent post, NFT Marketplace CEO Devin Finzer stated that the company was committed to delivering a superior customer experience. “ready 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,” Finzer said. “By targeting NFTs, the SEC would stifle innovation on an even broader scale: hundreds of thousands of online artists and creatives are at risk, and many do not have the resources to defend themselves.”
Wells’ notice does not necessarily mean that SEC will bring a case against a company. It only means there is an ongoing investigation.
This year the SEC issued Wells notices to Uniswap Consensys Robinhood and a number of other crypto-related companies.
“NFTs are fundamentally creative goods: art, collectibles, video game items, domain names, event tickets, and more,” Finzer continued. “We should not regulate digital art in the same way we regulate collateralized debt obligations.
“…By targeting NFTs, the SEC is diving into new, uncharted waters, with potentially harmful consequences for consumers, creators and entrepreneurs alike,” OpenSea said in a blog post. “OpenSea is confident in its legal operation and we are certain that users do not trade securities by using the platform to buy or sell NFTs.”
The SEC didn’t immediately return a request for comment.
OpenSea will also pledge $5 million to “Cover legal fees for NFT devs or creators receiving a Wells notification.”
“If NFTs were classified as securities, not only would the classification be incorrect but also dangerous to investors.” the livelihoods of artists, OpenSea argued.
Earlier this summer, two NFT creators filed a lawsuit against the SEC seeking clarity on the regulator’s approach to NFTs. The case is still ongoing.
Jonathan Mann and Brian Frye filed the suit out of “????????????????????????????????????????????????????????????????????????????????????????????” against the lack of clarity.
“The complaint stated that it would have been absurd to believe that Bob Dylan or Janis Joplin as well as the Rolling Stones and Jimi Hendrix could not register their songs for general sale by examining the SEC Form S-1.
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