Crypto community on OpenSea Wells Notice: ‘Welcome to the club’

With the SEC’s sweeping crackdown running rampant, a number of pro-crypto voices have come out in opposition to the Wells Memorandum, which was sent to NFT Market OpenSea on August 28.

Just over a week after reports that Democratic candidate Kamala Harris had begun adopting crypto-friendly policies, the next company the Securities and Exchange Commission put on the chopping block is OpenSea.

News @Açıkdeniz Obtaining the Wells Memorandum clearly and simply shows that the SEC’s current crusade against the crypto industry continues unabated. This contradicts what Vice President Harris said two weeks ago when she announced her economic agenda: picture.twitter.com/cafsHJ6DhU

— Brian Quintenz (@BrianQuintenz) August 28, 2024

The SEC’s Wells Notice suggests that OpenSea could be sued for violating federal securities laws by facilitating sales of non-fungible tokens or digital collectibles through its on-chain marketplace.

OpenSea launched in 2017 and gained momentum during the NFT boom in 2020/2021. Many have likened digital art collections in the NFT market to Baseball and Pokemon trading cards, but with web3-inspired art published on decentralized networks like Ethereum (ETH).

The SEC are clowns who foolishly pretend that digital art magically becomes a security when added to the blockchain.

Hayden Adams, CEO of Uniswap

OpenSea has pledged a $5 million legal aid package for creators, while MonkeDAO attorney Ariel Givner has allayed fears of direct lawsuits against individual artists. Coinbase CEO Brian Armstrong has expressed an optimistic outlook for crypto operators under scrutiny by the SEC.

The industry chorus condemned the move as another “regulation by force” ploy by the SEC, headed by Gary Gensler, who many pro-crypto figures say should be fired. Speculators also highlighted that OpenSea’s Wells Notice was published less than a day after former President Donald Trump released his fourth NFT collection.

It’s definitely a coincidence that Trump launched another NFT collection the same day…

— Satoshi Club (@esatoshiclub) August 28, 2024

The news did little to boost Harris’ chances in Polymarket, as Trump moved ahead by 1%. Bets on who will win the 2024 presidential election continue to flip a coin on the Polygon-based predictions market. News of another SEC crackdown on cryptocurrencies could strain already-tense relations between a potential Harris presidency and an industry that spent $119 million on lobbying in 2024.

So if OpenSea received a Wells notice, why didn’t Sotheby’s receive a notice for the art sale?

Or Nintendo selling Pokemon

Or Rolex to sell watches

Or Valve to sell CS skins

So are NFTs bad just because they’re on-chain, or where do you draw the line? https://t.co/VUqy7Au6ZC

— Andrew Steinwold (@AndrewSteinwold) August 28, 2024