The Chief Legal Officer of crypto company Ripple is publicly issuing a challenge to the US Securities and Exchange Commission (SEC).
Yesterday, the CEO of the world’s largest non-fungible token (NFT) marketplace, Devin Finzer of OpenSea, announced that the SEC had hit OpenSea with a Wells Notice.
A Wells Notice is a warning from the SEC that they intend to take legal action against a company and is not an indication of wrongdoing.
Finzer said,
“OpenSea has received a notice from Wells from the SEC threatening to sue us because they believe NFTs on our platform are securities. We are shocked that the SEC would take such drastic action against creators and artists. But we are ready to stand up and fight.
Cryptocurrencies have long been in the SEC’s crosshairs, and companies like Coinbase, Uniswap, Robinhood, Kraken, and Consensys have fought against the SEC’s one-sided approach of “regulation by enforcement.”
But this is a step 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 lack the means to defend themselves.”
NFTs are seen by many as the next wave in artistic intellectual property ownership, and according to Ripple CLO Stuart Alderoty, the SEC ruled almost 50 years ago that art galleries did not have to register with the SEC.
“Fun fact: In 1976, the SEC ruled that art galleries did not have to register with the SEC even if they advertised and sold to buyers with investment motives.”
The SEC has not responded to Alderoty’s statement at the time of writing.
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Featured image: Shutterstock/ded pixto