SEC issues Wells notice to NFT market OpenSea | Wilnesh News

Cryptocurrency market OpenSea has been added to the SEC’s target list as regulators expand their crackdown on the industry.

The company’s CEO said In X’s post On Wednesday, the U.S. Securities and Exchange Commission issued a Wells Notice against OpenSea.

A Wells Notice is typically one of the last steps before the SEC issues formal charges. It typically lays out the framework for a regulatory argument and provides potential defendants with an opportunity to rebut the SEC’s claims.

OpenSea officials said the letter claimed that non-fungible tokens (NFTs) sold on its platform were securities. OpenSea is a popular platform that allows users to create, sell, and buy NFTs.

OpenSea CEO Devin Finzer wrote in an article that the company was “shocked that the SEC would take such sweeping action against creators and artists” but that they were “ready to stand up and fight.”

Fenzer calls it “entering uncharted territory.”

“By targeting NFTs, the SEC will stifle innovation on a broader scale: Hundreds of thousands of online artists and creatives are at risk, many of whom don’t have the resources to protect themselves,” he added, noting that the company has pledged to pay $5 million to cover the legal fees of NFT creators and developers who were notified by Wells.

In addition to the social media posts, OpenSea also recommended a blog post by Finzer to CNBC. In it, the OpenSea CEO added that classifying NFTs as securities would “misunderstand the law” and that he believed his company “operates legally” and that “users will not trade securities.”

So far this year, the SEC has issued notices to Wells, filed lawsuits or reached settlements with a series of cryptocurrency companies focused on Ethereum and decentralized finance, including ShapeShift, TradeStation and Uniswap. The agency also It is said Investigate the Ethereum Foundation.

Centralized exchanges and trading platforms Coin libraryKraken, Binance and Robinhood have also launched legal battles with regulators.

In May of this year, investment platform Robinhood announced that it had received a Wells Notice regarding the company’s crypto business. The SEC also sued Coinbase and Binance. Meanwhile, a California judge ruled Friday that the commission’s case against Kraken will continue.

With regulators facing multiple pending legal challenges and continued uncertainty over the future of cryptocurrency regulation in the United States, some cryptocurrency businesses have said they are considering leaving the country entirely.

SEC Chairman Gary Gensler has said repeatedly in multiple interviews that he believes much of the industry already falls under the SEC’s jurisdiction and that its lawsuits are bringing the industry into compliance. Cryptocurrency companies argue that the latest legal battles do not provide the regulatory clarity the industry has sought for years.

Former President Trump, the Republican presidential candidate who calls himself a pro-cryptocurrency candidate, has promised to “fire” Chairman Gensler if he wins in November.

Although the President does not have the power to fire appointed commissioners. Even if Trump appoints a new, more crypto-friendly SEC chairman, Gensler will remain a commissioner at the independent agency.