Photo credit: Tiffany Hagler-Geard/Bloomberg

OpenSea’s CEO Devin Finzer informed the crypto community on X that they have received a Wells notice from the US Securities and Exchange Commission (SEC), “threatening” to sue because they believe NFTs on their platform are securities. 

Seeing this as a move against creators and artists, Finzer claimed that they are “ready to stand up and fight.” 

OpenSea’s CEO also highlighted instances where the SEC has taken action against cryptocurrencies and companies like Coinbase, Uniswap, Robinhood, Kraken, and Consensys, which are pushing back against the SEC's “regulation by enforcement” approach.

Expressing his thoughts on SEC’s legal action, Finzer, said:

“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.”

In the X post, Finzer mentioned that NFTs are different from other assets, calling them “fundamentally creative goods.” The CEO of OpenSea claimed that NFTs should not be regulated in the same way as collateralized debt obligations. 

Finzer also mentioned that the SEC’s interference through regulation could discourage creators and artists from producing digital art. This, in turn, could result in the SEC stifling innovation on a broader scale.

For the uninitiated, a Wells notice is a letter that the SEC sends to a company after the conclusion of an investigation, warning that enforcement action will be taken against the firm. The company is also given the opportunity to justify why the enforcement action should not be taken.

Concluding his statements, Finzer mentioned that OpenSea will be pledging “$5M to help cover legal fees for NFT creators and devs that receive a Wells notice.” The OpenSea CEO also hopes that “SEC will come to its senses sooner rather than later,”