NFT market OpenSea has been issued a Wells discover by the Securities and Trade Fee (SEC) which is threatening to sue the agency on the grounds that non-fungible tokens (NFTs) on the platform are securities. 

OpenSea CEO Devin Finzer introduced the discover on X (previously Twitter) on Wednesday.

OpenSea has responded to the discover with an official assertion wherein it argues that NFTs are used for buying recreation objects, supporting artists, and “boasting allegiance” to a sports activities group.

“Classifying NFTs as securities would not only misinterpret the law, but it would also jeopardize artists’ livelihoods, disempower collectors and gamers, and stifle innovation across the many promising use cases for NFTs,” it learn.

Learn extra: Newest third-party breach leaks OpenSea person APIs

It continued, “We’re confident that OpenSea operates legally and that our users aren’t trading securities when they buy or sell NFTs using our platform.” 

The agency has additionally pledged $5 million to assist cowl the authorized charges of any NFT creators that obtain a Wells discover. OpenSea mentioned, “We hope that the SEC will reconsider its stance and approach this issue with the open-mindedness it deserves.”

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