The post SEC Is Coming After OpenSea—These Are the NFTs That Could Be in Trouble appeared on BitcoinEthereumNews.com.

When NFT marketplace OpenSea announced last week that it anticipates a lawsuit from the U.S. Securities and Exchange Commission (SEC), bells of panic rang far and wide through the cryptosphere. The U.S. government was opening up a major new front in its war on crypto: It was finally coming for the heart of the NFT market.  But what does the development actually mean? Is every major NFT project now about to be labeled an illegal, unregistered security as some fear? Or might only particularly cash-grabby projects be at risk of legal scrutiny? While it may be some time before the SEC makes its position clear, legal experts told Decrypt that past NFT-related enforcement actions by the SEC and statements from agency leadership indicate that a large swath of NFT projects—those that made certain marketing decisions—could be swept into any future litigation. But likely not at the start, and not all at once. “They’re always going to go after what they perceive as the lowest hanging fruit first,” Jeremy S. Goldman, a litigator focused on NFT regulation, told Decrypt. “They’ll just pick on the 50 projects with the most egregious fact patterns.” To Goldman, “egregious” means two things in particular: projects that either hinted at some sort of return on investment when first marketing their NFTs, or projects that promised utility in the form of a team of people who were going to work to increase a collection’s brand or IP value. “Those are the hallmarks of an investment,” Goldman said.  In other words, the SEC is likely to follow the same playbook it used when it went after the scores of crypto startups that raised funds through ICOs. If you’re a startup that raised money by selling NFTs to build a product, you’re potentially in the SEC’s crosshairs. Edward Lee,…

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Filed under: News - @ September 7, 2024 2:19 pm