Connect with us

Hi, what are you looking for?

NFT
NFT

Cryptocurrency

OpenSea is facing a class-action lawsuit regarding the alleged selling of unlicensed NFTs

Two OpenSea customers have launched a class-action lawsuit alleging that, as unregistered securities, NFTs they bought on the platform—including Bored Ape Yacht Club tokens—are useless. The lawsuit suggests possible legal action for allowing unregistered securities by highlighting OpenSea’s receipt of a Wells notification from the SEC. The plaintiffs claim OpenSea broke warranties, misled consumers, and unfairly made money off of these deals.

Two NFT market OpenSea customers have launched a class-action lawsuit claiming the platform sold unregistered securities. Claiming that the NFTs they bought—including those from the Bored Ape Yacht Club collection—are now useless because of their alleged unlawful character, Anthony Shnayderman and Itai Bronshtein started the complaint on September 19 in a Florida federal court.

Their case revolves mostly on OpenSea’s recent revelation of getting a Wells notice from the Securities and Exchange Commission (SEC), indicating that the platform would be vulnerable to enforcement action for enabling the trade of unregistered securities. A Wells notice indicates that the SEC has finished looking into things and could decide to sue the receiver.

The complaint draws attention to past SEC proceedings against other NFT initiatives including Stoner cats 2 and Impact Theory where the NFTs were judged unregistered securities. The plaintiffs argue that the NFTs they bought fit the legal definition of an investment contract under U.S. securities law—the Howey test—which guides whether a transaction qualifies as one.

Shnayderman and Bronshtein claim OpenSea deceived them into buying NFTs they now see as “worthless” by exaggerating their influence on the market. They say OpenSea broke its assurance to guarantee regulatory compliance by failing to stop the selling of unregistered securities. Moreover, they claim that OpenSea charged fees on unregistered securities sales, therefore unfairly profiting from them.

Representing Shnayderman and Bronshtein, managing partner of The Moskowitz Law Firm, Adam Moskowitz underlined the necessity of a better legislative framework for NFT sales. He underlined the need of establishing a properly-regulated environment that advances the developing crypto sector as well as customers.

The action signals another chapter in the continuous legal issues confronting the NFT market as regulatory scrutiny rises, even although OpenSea rejected the accusations, claiming the complaint is unfounded and misguided.

Advertisement

You May Also Like

Cryptocurrency

In this week's Crypto Chronicle, we explore Meta's new AI search engine that aims to reduce reliance on Google and Microsoft, Banco Bisa's custody...

Business

To make it easier for companies to adopt decentralized technologies, Hitachi Solutions has introduced a new Web3 development assistance package. This program offers a...

Business

Due to difficulties in the decentralized finance (DeFi) industry, dYdX Trading has announced a major layoff of 35% of its employees. As the company...

Business

Three days following its launch, Bitget Wallet Lite had amassed 6 million users on Telegram, demonstrating its quick success. This multichain wallet seeks to...

polkadot
Polkadot (DOT) $ 3.88 3.03%
bitcoin
Bitcoin (BTC) $ 69,308.57 2.81%
ethereum
Ethereum (ETH) $ 2,422.50 0.01%
cardano
Cardano (ADA) $ 0.334431 2.12%
xrp
XRP (XRP) $ 0.512889 1.54%
stellar
Stellar (XLM) $ 0.093548 2.64%
litecoin
Litecoin (LTC) $ 66.00 0.39%