# SEC threatens OpenSea because they believe NFTs are securities

Source: https://x.com/dfinzer/status/1828791832009953706
Kiwi News: https://news.kiwistand.com/stories/SEC-threatens-OpenSea-because-they-believe-NFTs-are-securities?index=0x66cf3174bfe937f985b540c75fb7dbdb877af71325af3d0b5e01ce2d1385bbcf2347011b
Submitted by macbudkowski.eth on 2024-08-28 UTC, 5 upvotes, 2 comments

## Summary

OpenSea says it received a Wells notice from the SEC threatening to sue because the SEC believes NFTs on its platform are securities, and it has vowed to fight. The company argues that targeting NFTs would stifle innovation and put hundreds of thousands of online artists and creatives at risk, many of whom lack resources to defend themselves. OpenSea says it is pledging $5M to help cover legal fees for NFT creators and developers who receive a Wells notice. The post also cites a suit filed against the SEC by musician @songadaymann and conceptual artist @brianlfrye, who fear their art and music sales could be deemed unregistered securities offerings.

## Article

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

We're shocked the SEC would make such a sweeping move against creators and artists. But we're ready to stand up and fight.

Cryptocurrencies have long been in the crosshairs of the SEC, and companies like @coinbase, @Uniswap, @RobinhoodApp, @krakenfx, and @Consensys have been fighting against the SEC's single-track  approach of "regulation by enforcement."

But this is a move into uncharted territory. 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.

NFTs are fundamentally creative goods: art, collectibles, video game items, domain names, event tickets, and more.

We should not regulate digital art in the same way we regulate collateralized debt obligations.

As we've built OpenSea, we've heard so many stories about the impact of NFTs on people’s lives, including:

• Student artists finding full-time careers in selling their digital art
• Indie game developers instantly enabling open markets for their in-game items, without having to build marketplaces from scratch
• Passionate collectors from different corners of the world joining new communities, all centered around shared digital ownership

It would be a terrible outcome if creators stopped making digital art because of regulatory saber-rattling. Take, for example, the suit filed against the SEC by the musician @songadaymann and conceptual artist @brianlfrye, which describes their fear that the sale of their art and music could be deemed unregistered securities offerings.

In addition to standing our own ground, we're pledging $5M to help cover legal fees for NFT creators and devs that receive a Wells notice. Every creator, big or small, should be able to innovate without fear.

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

Until then, we'll stand up and fight for our industry.

Onwards 🌊⛵️

## Comments

**misha**: That was a long time coming I think, but still alarming. It feels lately governments are stepping up and trying to get a stronger grip on the internet, especially social media and crypto and not unrelated cryptography. 

Why now?

**michalis.eth**: Good thread about this at https://x.com/benroy__/status/1829075914707087539