The U.S. Securities and Exchange Commission (SEC) has ended its investigation into OpenSea, dropping allegations that NFTs sold on the platform were unregistered securities.
OpenSea CEO Devin Finzer announced the news on February 22 in a post on X (Twitter), calling it “a win for everyone who is creating and building in our space.” He added that classifying NFTs as securities “would have been a step backward—one that misinterprets the law and slows innovation.”
The SEC had issued a Wells notice to OpenSea in August, signaling that the agency found potential legal violations. At the time, Finzer stated, “We’re shocked the SEC would make such a sweeping move against creators and artists.” He also said OpenSea was ready to “stand up and fight.”
In response, OpenSea pledged $5 million to help cover legal costs for NFT creators and developers facing similar SEC actions. A month later, Coinbase launched a $6 million legal defense fund for NFT creators, partnering with OpenSea, a16zcrypto, and law firms to provide free legal support.
The SEC has been active in Web3 enforcement over the past two years, issuing Wells notices to several industry players, including NFT project CyberKongz and Immutable.
The uncertainty around regulations has led some companies to exit the space. Starbucks, Kraken NFT, and GameStop are among those that have shut down their NFT-related projects. DraftKings also discontinued its Reignmakers NFT game and marketplace, citing legal concerns.
