Gary Gensler, the US SEC Chair, has been the subject of criticism by Crypto and blockchain leaders for issuing a Wells notice to OpenSea, an NFT marketplace.
According to Devin Finzer, CEO of OpenSea, the US SEC had warned the NFT platform about the possibility of an enforcement action on August 28. The Wells notice was one of the few instances in which the US regulator had contemplated classifying an NFT as an unregistered security within its jurisdiction. However, it is uncertain whether the SEC will pursue enforcement against OpenSea.
Ji Kim, the chief legal and policy officer at the Crypto Council for Innovation (CCI), stated in an Aug. 28 X post that the US SEC’s assertion that NFT platforms should be regulated as securities exchanges is legally flawed and entirely absurd.
The US SEC charged an entertainment company in 2023 with conducting unregistered securities sales through NFTs. At the time, SEC Commissioner Hester Pierce expressed apprehensions, suggesting that the regulator should have clarified whether the tokens qualified as securities.
“If NFTs are securities, then everything collectible is a security,” stated Katherine Minarik, the chief legal officer of Uniswap Labs. “And that is not by the law.”
Finzer has committed to “standing up and fighting” any charges if the SEC chooses to pursue an enforcement action. Additionally, the platform will provide up to $5 million to cover legal expenses for NFT creators and developers in similar positions. According to CCI CEO Sheila Warren, Gensler had not publicly commented on the case at the time of publication, who implied that Wells’ notice had been “spurred.”
US SEC Chair is the focal point of debate
Gensler has been the driving force behind enforcement actions against numerous crypto and blockchain companies, such as Binance, Coinbase, Ripple, and Kraken, since his appointment to the commission in 2021.
Although Gensler’s term is set to conclude in June 2026, there has been a demand from numerous US presidential candidates to express their opinions on his tenure before the November election.
Kamala Harris, the Democratic presidential nominee and Vice President of the United States, is prohibited from publicly criticizing any policies during her campaign to align with the administration, as US President Joe Biden appointed Gensler. Conversely, Republican Donald Trump intended to terminate the SEC Chair “on day one” upon reelection.
In an interview with X, North Carolina Representative Wiley Nickel expressed his disappointment with the SEC’s ongoing enforcement efforts, which are now focusing on the NFT marketplace OpenSea. “The SEC and Gary Gensler should renounce this course of action and collaborate with Congress to establish transparent and equitable regulations that promote innovation and preserve employment opportunities in the United States.”
