In Summary
The SEC concluded its investigation into OpenSea without classifying NFTs as securities.
OpenSea CEO Devin Finzer praised the decision for its positive impact on the development of NFTs and web3.
The Wells notice and the Coinbase lawsuit could both be resolved without enforcement action.
Promo:
Trade on BYDFi and get a chance to win prizes like an iPhone 16, a Rolex watch, and more!
The SEC has concluded its investigation into OpenSea. The Commission announced that it would not be taking enforcement action, affirming that NFTs are not securities.
The leading NFT marketplace was informed that no enforcement action would be taken. This is the second time the SEC has backed down from legal action against cryptocurrency platforms on Friday.
SEC Will No Longer Investigate OpenSea
Devin Finzer, co-founder and CEO of OpenSea, called the decision a win for the NFT community and web3. He argued that the SEC had misinterpreted existing law regarding NFTs, a mistake that could have slowed down progress in the field.
“This is a win for everyone creating and building in our space. Trying to classify NFTs as securities would have been a step backwards – a misreading of the law and a slowing down of innovation. Every creator, big or small, should be able to build freely without unnecessary barriers,” Finzer wrote.
This outcome follows a Wells notice that OpenSea received last August. The notice indicated that the SEC intended to pursue legal action, alleging that some or all of the NFTs traded on the platform might be securities.
OpenSea had set aside $5 million to support artists and NFT developers who might face similar actions. However, this fund will no longer be needed for this purpose.
Meanwhile, the SEC’s decision is a major relief for the NFT market, as OpenSea is preparing to launch its token in 2025. Considering that other competitors had already entered the cryptocurrency market, a regulatory investigation could have been further damaging to OpenSea.
Notably, this is the second time the SEC has announced the cancellation of legal proceedings today, February 21st. Earlier in the morning, the Commission announced plans to drop its lawsuit against Coinbase. The cryptocurrency exchange reported that SEC staff had agreed in principle to drop the lawsuit, pending final approval from the commissioners.
Overall, the SEC appears to be rapidly scaling back its crypto enforcement. However, its biggest case, the Ripple lawsuit, is still ongoing.
All information on our website is published in good faith and for general informational purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk, and they should re-evaluate it.
Read more: If you need a product to assist with tax issues and portfolio management in crypto, check out CoinLedger
