- Two OpenSea users have sued the marketplace for offering unregistered securities
- The two claim that the NFT marketplace sold valueless and “illegal” NFTs
- OpenSea recently received a Wells notice from the United States securities watchdog, SEC
Two OpenSea Users have sued the NFT marketplace for dealing with unregistered securities adding that it lists valueless and “illegal” NFTs. Anthony Shnayderman and Itai Bronshtein claim that the collectibles listed on the exchange like the Bored Ape Yacht Club (BAYC) are securities. They added that the marketplace is in trouble because the United States securities watchdog, SEC, could bring an enforcement against OpenSea, which may kickstart a legal battle between OpenSea and the SEC.
OpenSea to Counter the “Baseless Lawsuit”
Shnayderman and Bronshtein noted that tests on whether their NFTs are securities or not indicated that the collectibles they bought on the platform were securities. The pair further claimed that the exchange listed the “illegal” collectibles despite the marketplace saying they moderate all listings on the platform.
The pair said that the marketplace breached its own rules by not putting all its NFTs on the Howey test to determine whether they are securities. The two also claim that OpenSea knowingly profits from the sale of the unregistered securities.
Speaking to Cointelegraph, an OpenSea spokesperson said the duo relies on the marketplace’s disclosure of a letter from the SEC which doesn’t make their allegations true. The spokesperson added that OpenSea is ready to counter “this baseless lawsuit.”
SEC’s Continues to Regulate NFTs
Shnayderman and Bronshtein’s allegations come a year after the SEC sued Impact Theory and Stoner Cats. In the Impact Theory case, the SEC said that the media company offered investment contracts in the form of NFTs.
Stoner Cats NFTs creator agreed to the SEC’s observation that the collectibles are securities, settled the case for $1 million, and the collectibles removed from NFT marketplaces.
In April, the creators of NFT game CryptoKitties, Dapper Labs, disclosed that the company was unknowingly under SEC’s investigation.
With the SEC likely to take OpenSea to court for allegedly dealing in unregistered securities, Shnayderman and Bronshtein’s claims signal a legal battle even from OpenSea users whose collectibles have dropped in value.
