OpenSea Receives Wells Notice From SEC But Who Hasn't?

NFT marketplace OpenSea has received a Wells Notice from the US Securities and Exchange Commission (SEC).

A Wells Notice is usually sent ahead of launching a formal lawsuit. Coinbase, Uniswap Labs, Ripple, Robinhood, Consensys, and BUSD issuer Paxos are among those in the increasing list of crypto firms that have received such notices.

Robinhood Latest Alleged Crypto Outlaw to Face Wrath of SEC

Robinhood has joined the SEC’s Wells Notice Club alongside Ripple, Coinbase, Consensys, and Uniswap

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According to OpenSea's CEO Devin Finzer, the regulator issued the notice on the claim that NFTs on the platform are securities.

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

Finzer said OpenSea is "Shocked the SEC would make such a sweeping move against creators and artists," and that the company will "stand up and fight," pledging $5 million to cover legal fees for NFT creators and developers who might also be issued with a notice.

"I hope the SEC will come to its senses sooner rather than later, and that they'll listen with an open mind," he added.

The move isn't the first that the regulator has made against the NFT space. Back in 2023, the SEC took legal action against NFT projects Impact Theory and Stoner Cats on the basis that the projects broke security laws. Ultimately, both cases led to settlements.

Despite the SEC greenlighting Bitcoin ETFs, the regulator has retained its conservative and aggressive stance on the industry. Just this week, a California judge ruled that the SEC's lawsuit against Kraken will go to trial.

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Kraken’s motion to dismiss the SEC’s case has been overruled by US District Court Judge William H. Orrick

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Back in November, the SEC accused the crypto exchange of violating federal securities laws by failing to register as a broker, clearinghouse, or exchange. The lawsuit seeks to permanently bar Kraken from further securities violations and demands the return of its so-called "ill-gotten gains," along with other penalties.