SEC Wells notice targets NFTs on OpenSea

OpenSea CEO Devin Finzer said in a post on X that the company is “ready to stand up and fight”

article-image

Diego Thomazini/Shutterstock modified by Blockworks

share

OpenSea received a Wells notice from the Securities and Exchange Commission regarding NFTs being traded and sold on the platform. 

The NFT marketplace CEO Devin Finzer said in a post on X that the company is “ready to stand up and fight.”

“OpenSea has received a Wells notice from the SEC threatening to sue us because they believe NFTs on our platform are securities,” Finzer said. “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.”

A Wells notice doesn’t mean that the SEC will file a complaint against the company, but it discloses an investigation into the firm.

So far this year, the SEC has targeted a handful of crypto companies with Wells notices, including Uniswap, Consensys and Robinhood

Read more: A busy crypto lawsuit season looms

NFTs are fundamentally creative goods: art, collectibles, video game items, domain names, event tickets, and more,” Finzer continued. “We should not regulate digital art in the same way we regulate collateralized debt obligations.

Loading Tweet..

“…By targeting NFTs, the SEC is diving into new, uncharted waters, with potentially harmful consequences for consumers, creators and entrepreneurs alike,” OpenSea said in a blog post. “We’re confident that OpenSea operates legally and that our users aren’t trading securities when they buy or sell NFTs using our platform.”

The SEC didn’t immediately return a request for comment. 

OpenSea will also pledge $5 million to “help cover legal fees for NFT creators and devs that receive a Wells notice.”

“Classifying NFTs as securities would not only misinterpret the law, but it would also jeopardize” the livelihoods of artists, OpenSea argued.

Earlier this summer, two NFT creators filed a lawsuit against the SEC seeking clarity on the regulator’s approach to NFTs. The case is still ongoing. 

Jonathan Mann and Brian Frye filed the suit out of “deep frustration” against the lack of clarity.

“It would be crazy to think that Bob Dylan, Janis Joplin, the Rolling Stones, Ray Charles, Jimi Hendrix, Madonna or Louisiana’s own Louis Armstrong should have retained attorneys to examine the SEC’s Form S-1 to see how to register their music for sale to the general public,” the complaint said.

Updated August 28, 2024 at 10:13 am ET: Added comments from OpenSea.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Unlocked by Template (11).png

Research

Union’s technical design brings measured improvements to crosschain interoperability. By combining a consensus-verified hub with novel constructs like state lenses and ZK proofs for client updates, Union achieves an interoperability protocol that is highly performant, trust-minimized, and scalable.

article-image

Crypto finds fundamentals, Chanos books profits and prediction markets make trouble

article-image

The token has crashed over 65% and been marked as dangerous due to its contract’s permissions

article-image

FOMC July minutes may hold the key to Powell’s speech tomorrow

article-image

Singapore’s largest bank is issuing crypto-linked structured notes on Ethereum, but the tokens will remain permissioned

article-image

Jupiter borrows Fluid’s innovative risk engine