Malaya Ruiz
OpenSea has officially joined the ranks of an elite group of A-listers! But at what cost, you ask? Oh, you know, not much… just a Wells notice from our friendly neighbor, the SEC. An initiation rite if you will. ☠️🤭
The invite says, “We intend to take legal action against you soon – see you in court!” Sealed with a kiss from Gensler. 😘
Here we go again with the heated topic of debate (with one party not faring well – you know who) about whether or not NFTs are securities! 🤓
Just look at a Wells notice as the SEC’s secret decoder ring. When they buzz you with one, it means they’re pretty sure you’ve been up to no good and might want to have a chat with you. 🗣️🍵 But not at a five-star restaurant, more like an enclosed space with paneled walls, several benches, a witness stand, and a seat reserved for the guy wearing a robe. 👨⚖️
Recently, Uniswap, the crypto folks at Robinhood, and those brainiacs at Consensys had their fun interrupted by this not-so-friendly reminder. Looks like the SEC is keeping a close eye on the DeFi crowd! 🤨 Somehow it became like a badge of honor for the targets, and it’s not looking very good for the SEC. 💩
So when OpenSea got the dreaded Wells notice because the SEC believes the NFTs on its platform are securities, CEO Devin Finzer did not take it sitting down. 🙌🏼 No, sir. He wrote a blog post. 📝 In it, he made some solid points about this move by the SEC potentially affecting not just NFT marketplaces but especially consumers, creators, and entrepreneurs.
Finzer threw a curveball at the SEC, challenging them to really think hard and long about whether the NFTs on OpenSea are actually securities. 💭❓ If we go down that rabbit hole, what’s stopping them from saying someone’s collection of limited-edition cereal boxes is a security too? Then he mentioned fine art, and all I could imagine are museums handing out investor brochures! 😂 Our guy Finzer seems to be asking the right questions. But as for valid answers from the SEC, well, let’s just say the crickets are chirping loudly in their front yard. 🦗🦗
Not only did Finzer lay down his cards – he also brought back Brian Frye into the picture. Oh, this is just getting better. 🧐
And back into the picture Frye did come! 😎
For those of you who don’t know, Frye is a conceptual artist and law professor who filed a lawsuit against the SEC along with Jonathan Mann, the singer and songwriter known as Song-A-Day Man. And yes, they were also pestered by the SEC for similar reasons. Talk about pushing buttons in this space! 🤪
The support group joined the party and Frye did not mince words once again. He said if the SEC wants to take a swing at regulating NFTs, then they might as well open the floodgates to the whole art market too. ⛔ But how is that possible when the art market has been around since time immemorial and the SEC only came into existence in 1934, and between now and then, regulating the art market was unheard of? 😆
“Oh is that a Picasso? Yeah, we’ll have to see if this piece complies with our 10-page regulation on ‘What is abstract?’ before it can go on sale.” 🤣😆
In retrospect, Frye realized it’s not really about implementing regulation – it’s about hunting for someone who’d rather settle than wrestle. 💲 That explains why they went after Impact Theory and Stoner Cats – two NFT projects that had seen better days. Make a note of this: Impact Theory was ordered to pay over $6.1 million. That’s a big old mix of disgorgement, prejudgment interest, and a civil penalty. Wild, wild, wild! 😵
So, obviously, the debate isn’t over and it shows no signs of slowing down whatsoever. 😌 But here’s something interesting we found in the statement by Commissioners Peirce and Uyeda concerning the Stoner Cats case:
Although this statement was made last year, it still points to the nuances involved in the issue of classifying NFTs as securities these days. Even though the commissioners said this in what seems like ages ago and who knows if they’ve changed their minds since then, this just shows how the SEC is being vague about the criteria for calling out NFT projects. 👻 Either that or it was just a regular roulette session at the office and the most recent unlucky target was OpenSea. 🎲🃏
💭 So what do you think? Should this cat-and-mouse chase continue or should the SEC give up on nitpicking harmless digital collectibles? ❔❔
Disclaimer: If you are a fan of NFTs, you might love this kind of content. If not, no bad blood! Just remember to critically assess every opinion out there, including mine! 🧐 And to be absolutely clear, this isn’t a sales pitch disguised as a friendly hug. No one’s twisting your arm here!
Malaya has positions in SHIB, ETH, USDT, MATIC, etc. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
