The SEC has ended its investigation into OpenSea. The commission announced that it would not take legal action, asserting that NFTs are securities.
The leading NFT marketplace has been notified that no enforcement actions will be taken. This marks the second legal action the SEC has dropped against crypto platforms on Friday.
SEC Will No Longer Probe OpenSea
OpenSea’s co-founder and CEO, Devin Finzer, called the decision a win for the NFT and web3 community. He stated that the SEC misinterpreted current laws regarding NFTs, a mistake that could have slowed progress in the sector.
“This is a win for everyone who is creating and building in our space. Trying to classify NFTs as securities would have been a step backward—one that misinterprets the law and slows innovation. Every creator, big or small, should be able to build freely without unnecessary barriers,” wrote Finzer.
This outcome follows a Wells notice that OpenSea received last August. The notice indicated that the SEC planned to initiate legal action, arguing that some or all NFTs traded on the platform might be securities.
OpenSea set aside $5 million to support NFT artists and developers who could face similar actions. However, this fund will no longer be required for this purpose.
Meanwhile, the SEC’s decision is a major relief for the NFT marketplace, as OpenSea is preparing to launch its token in 2025.
Considering that other competitors had already entered the crypto market early, a regulatory probe could have been further damaging for OpenSea.
Most notably, this is the second legal dismissal announced by the SEC today, on February 21. Earlier in the morning, the Commission announced plans to dismiss its lawsuit against Coinbase.
The crypto exchange reported that SEC staff agreed in principle to drop the case, pending the commissioners’ final approval.
Overall, the SEC is seemingly scaling back crypto enforcement at a rapid pace. However, its biggest legal action, the Ripple lawsuit, still remains active.
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