Key takeout
- The SEC has concluded its Opensea investigation without filing a securities claim.
- Opensea had set up a $5 million legal fund for potential SEC actions against NFT artists and developers.
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The US SEC has compiled a study of Opensea, the leading NFTS market, and will not pursue enforcement measures that it claims to be NFTs as securities.
According to a Friday report from Bloomberg, Opencey received a statement from the SEC that the investigation has been completed and enforcement action will not be taken.
Opensea co-founder and CEO Devin Finzer believes the SEC's decision to close the investigation is a victory for the NFT and the Web3 community. Finzer believes that the agency's initial stance on NFTS is a misconception of existing law and hinders innovation in this area.
“This is a victory for everyone who creates and builds our space. Trying to classify NFTs as securities was a step backward as misinterpreting the law and slowing down innovation. Let's go,” Finzer wrote to X:
The major development comes after Opensea received a Wells notification from the SEC last August, indicating the regulator's intention to pursue legal action.
The Wells Notice is a formal notice that the SEC plans to pursue legal action. This provides recipients with the opportunity to respond and present discussions about the impending litigation before the SEC makes a final decision.
Wells' notice suggests that the SEC believes that some or all of the NFTs traded on the platform constitute securities.
In preparation for potential legal challenges, Opensea had allocated $5 million to a legal fund designed to support NFT artists and developers who could receive similar notifications from the SEC.
The SEC's attitude towards classifying NFTs as securities faces opposition from the crypto community, claiming that such classification could hinder innovation in the digital art and merchandise market.
The SEC has also dropped its lawsuit against Coinbase. Today, Coinbase said it has agreed that SEC staff in principle will dismiss the lawsuit against the exchange and is awaiting final approval from the commissioner.
Dismissals, if finalized, will be made with bias, preventing the SEC from rekindling similar claims and could affect the outcome of related cases against other crypto exchanges.
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