The U.S. Securities and Exchange Commission (SEC) has sent a Wells notice to non-fungible token (NFT) marketplace OpenSea, according to the firm’s CEO.
Devin Finzer says in a new post on the social media platform X that the company has received a Wells notice from the SEC warning them of possible securities law violations.
A Wells notice is a warning issued by the SEC that it’s planning to pursue legal action against a company and is not an indication of wrongdoing.
Says Finzer,
“OpenSea has received a Wells notice from the SEC threatening to sue us because they believe NFTs on our platform are securities. We’re shocked the SEC would make such a sweeping move against creators and artists. But we’re ready to stand up and fight.
Cryptocurrencies have long been in the crosshairs of the SEC, and companies like Coinbase, Uniswap, Robinhood, Kraken and Consensys have been fighting against the SEC’s single-track approach of ‘regulation by enforcement.’
But this is a move into uncharted territory. 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.”
Finzer is promising that OpenSea will defend itself against the SEC as well as put up $5 million to cover legal fees of NFT artists who may also receive a similar Wells notice.
“In addition to standing our own ground, we’re pledging $5 million to help cover legal fees for NFT creators and devs that receive a Wells notice. Every creator, big or small, should be able to innovate without fear. I hope the SEC will come to its senses sooner rather than later, and that they’ll listen with an open mind. Until then, we’ll stand up and fight for our industry.”