NFT marketplace OpenSea anticipates a lawsuit from the U.S. Securities and Exchange Commission (SEC), causing concern in the crypto community. Legal experts suggest that certain NFT projects may be at risk of legal scrutiny if they made marketing decisions that hinted at investment returns or promised utility in increasing a collection's value. The SEC is expected to follow a similar approach taken with ICOs, focusing on projects with egregious fact patterns. Statements made during a collection's rollout may be a defining factor for the SEC. The use of creator royalties as a standard to classify NFT projects as securities could spell trouble for the industry. However, iconic NFT collections like CryptoPunks may be less likely targets due to difficulty in proving their initial design and marketing as investments. If OpenSea is sued, the specific NFT collections deemed illegally traded securities may become known in the future. OpenSea may already be aware of the collections the SEC is targeting.



Other News from Today