OpenSea, which describes itself as “the world's largest” non-fungible token (NFT) marketplace, said in a blog post on Wednesday that it had received a Wells Notice from the SEC, suggesting that the regulator may soon file suit against the company.
CEO Devin Finzer said in a tweet that the SEC is alleging that NFTs on OpenSea's platform are unregistered securities. He then said that crypto companies have “long been in the crosshairs of the SEC,” and that the SEC has made similar allegations against Binance and Coinbase. The crypto industry has long argued that tokens are not traditional securities, even though they are tradable assets that can store value.
“The SEC does not comment on whether or not there is an investigation,” an SEC spokesperson said in an email to TechCrunch.
OpenSea's CEO said he intends to “fight for the industry” and has pledged to donate $5 million to cover the legal costs of NFT creators and developers who have received a Wells Notice.