Two users of the NFT marketplace OpenSea have initiated a class-action lawsuit alleging the sale of unregistered securities. Filed in a Florida federal court on September 19, the suit involves Anthony Shnayderman and Ital Bronshtein, who claim their investments in the Bored Ape Yacht Club collection have become virtually worthless due to the alleged illegal status of these NFTs.
The lawsuit gains traction from recent developments involving the Securities and Exchange Commission (SEC), which has issued a Wells notice to OpenSea. This notice signifies that the SEC is investigating the company for potential legal violations related to the trading of unregistered securities.
Shnayderman and Bronshtein reference previous SEC actions against NFT projects like Stoner Cats 2 and Impact Theory, where the agency determined that such NFTs were indeed classified as unregistered securities. They argue that the NFTs in question meet the criteria for investment contracts under the Howey test, a legal framework used to assess whether transactions qualify as investment contracts.
The plaintiffs accuse OpenSea of misleading them into purchasing what they now consider “worthless” NFTs, alleging that the platform failed to adequately moderate listings that included these unregistered securities. They further assert that OpenSea breached its duty by not properly overseeing its marketplace, resulting in unjust enrichment through transaction fees from these sales.
Adam Moskowitz, managing partner at The Moskowitz Law Firm and legal counsel for the plaintiffs, underscored the importance of regulatory oversight in the NFT market. “With today’s evolving regulations, there must be a structured process for the sale of NFTs within a well-regulated framework,” Moskowitz stated, expressing a desire for a collaborative effort with OpenSea to enhance consumer protection and industry standards.
Related topics:
From $3,000 to a Fortune: How BlockDAG Could Be Your Next Big Crypto Win
Weekly NFT Sales Drop to $73.7M Amid Surge in Solana Network Sales
