The U.S. Securities and Exchange Commission is coming after crypto again. This time, its attack is against the OG non-fungible token exchange OpenSea.
On Wednesday, OpenSea’s CEO Devin Finzer, wrote in post on X that the SEC has issued a Wells notice against the popular NFT market. A Wells notice, usually the last step before formal charges are issued, provides a framework for the agency’s regulatory argument and gives the accused party an opportunity to rebut the SEC’s claims.
Unsurprisingly, the SEC is arguing that non-fungible tokens are securities — financial assets that can be sold or traded in a financial market. The decision to issue a Wells notice rather than provide clear regulatory framework for these nascent technologies is in line with the SEC’s current modus operandi of regulation through enforcement.
Finzer wrote that OpenSea was “ready to stand up and fight,” but added they were surprised the agency “would make such a sweeping move against creators and artists.” He went on to say that the SEC’s decision to target NFTs “would stifle innovation on an even broader scale,” noting that hundreds of thousands of creators are at risk of being sued.
The move by the SEC is part of its broader attack against crypto and Web3 platforms. In 2024, it sent Wells notices or filed lawsuits against Uniswap, TradeStation, and Shapeshift. It’s also been involved in legal battles against the top centralized exchanges, including Binance, Coinbase, and Kraken. On Friday, a judge in California ruled that the case against Kraken will proceed to trial.
While this is anything but good news for the NFT space (which had a stellar run last week), Finzer believes his company “operates legally” and that classifying NFTs as securities is a misinterpretation of the law. Shortly after the news, several crypto influencers and players, including Coinbase CEO Brian Armstrong, posted their support for OpenSea on Crypto Twitter.
Furthermore, OpenSea has pledged up to $5 million to cover legal fees for creators and developers who receive Wells notices from the SEC.
Crypto’s Uncertain Future in the U.S.
Anyone who’s been in the space the past couple of years already knows that the SEC and its top dog Gary Gensler have it out for crypto and NFTs. While failing to provide clear regulatory framework for these nascent technologies, the regulatory agency has had no quarrels with issuing Wells notices and bringing platforms and individuals to court.
In fact, in 2023 alone, the SEC lodged over 46 enforcement actions against 124 defendants, all related to the cryptocurrency industry. From suing the nation’s top crypto exchanges to its current position of throwing FUD at NFT artists and creators via a potential suite against OpenSea — the SEC has been anything but friendly to the crypto and Web3 communities.
But that could all change soon thanks to one unlikely individual: Donald Trump.
The U.S. election between former president Donald Trump and current vice president Kamala Harris set for November is shaping up to be a tight race. But as time goes on, Trump looks more and more to be the champion of crypto. Here are some noteworthy actions from Trump:
- At the Bitcoin Conference in Nashville in late July, Trump said he’d fire Gary Gensler on Day 1. He also spoke bullishly about crypto and said he’d make the U.S. the “crypto capital.”
- Trump has been endorsed by independent candidate RFK Jr., the most bullish candidate in the race on Bitcoin. RFK Jr. also spoke in Nashville.
- Trump just released his fourth NFT collection this week, the “America First Edition.” His wife Melania has also released several NFT collections.
- A financial disclosure report recently revealed that Trump holds over $1M in ETH.
- In August, Trump released a limited set of “Bitcoin Sneakers” that sold out in minutes.
- Today, August 29th, Trump announced he’d make the U.S. the “crypto capital of the planet.”
Although Trump has been known to change his mind on a whim, it appears he’s all-in on Bitcoin and crypto. His opponent Kamala Harris, however, has yet to express her thoughts about the industry in any detail. Furthermore, rumors have surfaced that she’s considering making Gary Gensler the Treasury Secretary if she wins in November.
While there’s still a few more months for the candidates to clarify their positions on crypto, for now, Trump — the man who once said he prefers U.S. dollars and that Bitcoin “seems like a scam” — is the top crypto candidate. At Rarity Sniper, we’ll be watching closely to see how this all plays out.