The SEC has issued a Wells notice to OpenSea, stating that non-fungible tokens (NFTs) are securities.

• The SEC has included OpenSea in its list of targets as part of its ongoing efforts to regulate the crypto market.
• On Wednesday, OpenSea received a Wells notice from the U.S. Securities and Exchange Commission, as stated by the company's CEO in a post on X.
• The OpenSea chief claims that the NFTs sold on its platform are securities, according to a letter. OpenSea is a widely used platform for creating, selling, and buying NFTs.

The SEC has included OpenSea in its list of targets as part of its ongoing efforts to regulate the crypto market.

On Wednesday, OpenSea received a Wells notice from the U.S. Securities and Exchange Commission, as stated by the company's CEO in a post on X.

The SEC typically issues formal charges after a Wells notice, which presents the framework of the regulatory argument and allows the accused to respond.

The OpenSea chief claims that the NFTs sold on its platform are securities, according to a letter. OpenSea is a widely used platform for creating, selling, and buying NFTs.

Devin Finzer, CEO of OpenSea, expressed shock in a post about the SEC's move against creators and artists but vowed to stand up and fight.

Finzer calls it a "move into uncharted territory."

The SEC's targeting of NFTs could stifle innovation on an even broader scale, putting at risk hundreds of thousands of online artists and creatives who may not have the resources to defend themselves. The company has pledged $5 million to cover legal fees for NFT creators and developers who receive a Wells notice.

OpenSea CEO Finzer wrote a blog post on CNBC, stating that classifying NFTs as securities would misinterpret the law and that his company operates legally and its users aren't trading securities.

The SEC has taken enforcement actions against various crypto firms that operate in the ethereum and decentralized finance space, including ShapeShift, TradeStation, and Uniswap. Additionally, it is reported that the agency is investigating the Ethereum Foundation.

Legal battles with regulators have been engaged in by centralized exchanges and trading platforms such as Kraken, Binance, and Robinhood.

In May, Robinhood received a Wells notice from the SEC regarding its crypto operations. Meanwhile, a California judge ruled that the SEC's case against Kraken would proceed to trial, while the SEC has also sued Coinbase and Binance.

Due to the ongoing legal challenges from the regulator and the uncertainty surrounding the future of crypto regulation in the U.S., some crypto businesses are considering relocating outside the country.

Gary Gensler, SEC chair, has consistently stated in interviews that he believes the industry is already under SEC jurisdiction and that lawsuits are bringing it under compliance. However, crypto firms contend that the recent legal battles have not provided the regulatory clarity they have been seeking for years.

If Donald Trump wins the presidency in November, he has promised to remove Chair Gensler from his position.

Even if Trump were to appoint a new and more crypto-friendly SEC chairman, Gensler would still be a commissioner on the independent agency, as the president does not have the power to fire appointed commissioners.