06/09/2024 OpenSea receives SEC Wells notice, monthly NFT sales fall below $400M: Nifty Newsletter

OpenSea CEO Devin Finzer said that the NFT marketplace received a Wells notice from the SEC, suggesting potential enforcement action from the agency.

OpenSea receives SEC Wells notice, monthly NFT sales fall below $400M: Nifty Newsletter

In this week’s newsletter, find out how former United States president Donald Trump’s fourthnon-fungible token (NFT)collection performed, and read about the US Securities and Exchange Commission sending a Wells notice to NFT marketplace OpenSea. Take a look at how crypto advocates reacted to the notice, and check out Cointelegraph’s interview with a Web3 executive explaining how NFTs could potentially be classified as securities. In other news, the monthly sales volume of NFTs fell below $400 million for the first time in 2024.

Trump’s fourth NFT collection sees $2.2 million in sales

Former US President and current presidential candidate Donald Trump released his fourth dive into the world of NFTs with a trading card collection called America First. The collection gained massive support upon its launch, earning Trump $2.2 million in crypto.

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However, some community members were not happy with Trump’s NFT project. A community member said the NFT project makes the former president’s crypto push feel like a “grift.”

OpenSea marketplace receives Wells notice from the SEC

NFT marketplace OpenSea received a Wells notice from the SEC, suggesting that the agency might take action against the company in the future. OpenSea CEO Devin Finzer said that the SEC alleged that NFTs on the platform may be unregistered securities.

The OpenSea CEO said targeting NFTs would “stifle innovation” and put creatives at risk. Finzer also said that many of these artists don’t have the resources to defend themselves should the SEC take action.

Crypto advocates criticize SEC notice to OpenSea

Following the SEC’s Wells notice to OpenSea, crypto advocates went online to show their support and question the regulator’s move. Ji Kim, the chief legal and policy officer at the Crypto Council for Innovation, described the SEC’s assertion that NFT platforms should be regulated as a securities exchange as “utterly ridiculous” and “legally flawed.”

North Carolina Representative Wiley Nickel said on X that it is disappointing to see the SEC’s continued enforcement of regulation. The representative said that the SEC should instead work with Congress to establish fair and clear regulations to foster innovation.

NFTs can be securities, but SEC Wells notice to OpenSea “not productive” — Lawyer

While the SEC’s allegations may not be “productive,” a lawyer suggested that NFTs can be securities in some cases. In a Cointelegraph interview, Oscar Franklin Tan, the chief legal officer of Web3 organization Atlas Development, explained that some use cases for NFTs resemble investment products.

Tan said that minting stock certificates of NFTs and offering dividends will sound like they are securities. However, Tan believes these aren’t the NFTs people expect on a platform like OpenSea.

Monthly NFT sales fall below $400 million, marking yearly low

The monthly sales volume of digital collectibles fell to $374 million in August, marking its lowest point in 2024. Data from CryptoSlam showed that NFTs fell by 76% compared to its highest monthly sales record of $1.6 billion this year.

In August, NFTs also had a 31% drop in the number of transactions. Despite this, the average value of an NFT sale increased from $39.93 to $50.74, showing a 27% increase.

Arts

https://cointelegraph.com/news/opensea-sec-wells-notice-monthly-nft-sales-400-million-newsletter

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