OpenSea CEO vows to fight SEC Wells Notice

NFT marketplace OpenSea has received a Wells Notice from the US SEC indicating its intent to sue startup web3.

The Securities and Exchange Commission’s crackdown on allegedly non-compliant cryptocurrency service providers has now targeted OpenSea, one of the first and largest digital collectible trading platforms for Ethereum (ETH).

SEC investigators issue Wells Notices as a precursor to potential lawsuits, but this step does not always result in legal action.

Reacting to the news and alerting the community on August 28, OpenSea CEO Devin Finzer said the firm was “ready to stand and fight” against the SEC’s move to stifle innovation and unfairly scrutinize thousands of creators.

We should not regulate digital art the way we regulate collateralized debt obligations.

Devin Finzer, OpenSea CEO

Finzer addressed concerns in the crypto community regarding the SEC’s strict approach to cryptocurrencies and non-fungible tokens (NFTs), emphasizing that NFTs are fundamentally different from investment contracts typically regulated by the Wall Street regulator.

Finzer noted in his post on X that OpenSea plans to join rivals such as Coinbase, Consensys, Kraken, Robinhood and Uniswap in defending against SEC investigations and securities claims.

Finzer and OpenSea also pledged to commit $5 million to a legal fund to support creators and developers affected by the SEC’s Wells Notice.

It would be a terrible outcome if creators stopped producing digital art because of threats from regulators.

The SEC has filed lawsuits against numerous cryptocurrency-related entities over the past two years, including NFT projects such as Stoner Cats, owned by Ashton Kutcher and Mila Kunis, but this is the first time federal prosecutors have investigated a digital collectibles business.

OpenSea received a Wells notice from the SEC threatening to sue us because they believe the NFTs on our platform are securities.

We are surprised that the SEC would take such a sweeping action against creators and artists. But we are ready to stand up and fight.

Cryptocurrencies have long been…

— Devin Finzer (dfinzer.eth) (@dfinzer) August 28, 2024