SEC Drops OpenSea Probe: A Win for NFT Innovation

The U.S. Securities and Exchange Commission (SEC) has concluded its investigation into OpenSea, the world's largest non-fungible token (NFT) marketplace, according to a statement from the platform's founder and CEO, Devin Finzer. The SEC had issued a Wells notice to OpenSea in August 2022, suggesting it was considering enforcement action against the platform for potentially operating as an unregistered securities marketplace.

The SEC's decision to drop the investigation comes amidst a broader shift in the regulator's stance towards the cryptocurrency industry. The SEC is set to vote on a deal negotiated with Coinbase, which could see the exchange's lawsuit against the regulator dismissed. This move is seen as a positive development for the cryptocurrency industry and NFT creators, as it signals a more collaborative approach from the SEC.

OpenSea's CEO, Devin Finzer, took to social media to express his relief at the SEC's decision, stating that classifying NFTs as securities would have been detrimental to innovation in the space. "This is a win for everyone who is creating and building in our space," Finzer posted. "Trying to classify NFTs as securities would have been a step backward—one that misinterprets the law and slows innovation."

Chris Akhavan, chief business officer of NFT marketplace Magic Eden, echoed Finzer's sentiments, suggesting that the SEC's decision was a victory for the wider cryptocurrency space. "While we are competitors in the trenches, we share a deep belief in NFTs and what they will enable," Akhavan wrote.

The announcement of the SEC dropping its investigation into OpenSea led to an uptick in activity for the native token of NFT marketplace LooksRare. The token, LOOKS, saw a surge in active addresses shortly after the announcement, representing an approximately fivefold increase compared to usual figures, according to data from TheTie.