If the SEC Sues OpenSea, Here's Why the NFT Platform Could Win Easily - Ep. 696
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The fact that the SEC is suing OpenSea at the same time that you have pretty smart people also asking the SEC for a declaratory judgment which gives them clarity and clearance to engage in bona fide artistic activity suggests that the current regulatory approach being adopted by the agency is maybe less than appropriate for, you know, for for the for the space and that maybe they're overreaching in the OpenSea case.
Hi, everyone. Welcome to Unchained. You're an OHAI resource for all things crypto. I'm your host, Laura Shin, author of the Cryptopians. I started covering crypto 9 years ago, and as a senior editor at Forbes, was the 1st nature meter porter to cover cryptocurrency full time. This is the August 30th, 2024 episode of Unchained. Today's episode is brought to you by Gemini, a US based crypto exchange built for new and advanced traders. Gemini is offering new customers $15 in BTC when they trade. Sign up today to earn your Bitcoin. FBTC is the fastest growing Omni chain BTC asset this summer. Join
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On Wednesday, NFT platform, OpenSea, announced that the SEC had issued it a Wells notice, which notifies the company that the agency is contemplating suing OpenSea. Although the announcement was light on details, what do you think this Wells notice might be about?
My guess is that the SEC is continuing its campaign of treating anything crypto like a security. And that means that in OpenSea's case, I'm guessing they're gonna allege that OpenSea is running an unregistered exchange. We've seen this litigation. There's been a change in the SEC strategy over the last 5 or 6 years in this space. Initially, they were going after issuers of cryptocurrencies or, underwriters of cryptocurrencies. And starting in 2023, they started going after exchanges, principally Kraken, Coinbase, and Binance. So if I had to guess, because the Wells notice hasn't been made publ
And so that then means they'll go after the platform, but the actual issuers of whatever NFTs they're alleging are securities will not be given a chance to defend themselves in court?
It depends on it depends on which issuers, they choose to go after individually. It may be that they later decide that they're gonna go after certain issuers for issuing what they deem to be securities. They've done this in the past with individual issuers to kind of set a precedent, even though it's not a legally binding precedent. It's more a precedent in enforcement practice. And this was, in August of last year. They went after 2 projects, one called Stoner Cats and one called Impact Theory. We can talk about those in a bit. But essentially, my guess is that the SEC strategy, because they
Alright. So now let's talk about that stoner caps case. This was a well known one because it involved celebrities, Ashton Kutcher and Mila Kunis. Can you summarize what that case was about and how the SEC concluded that the sales of Stoner Cats NFTs were securities offerings?
Sure. So Stoner Cats was a television show about a bunch of, ganja smoking felines, that lived together with an old lady in in a house who was taking medical marijuana, and the cats, you know, obtained access to the marijuana. And as a consequence of that, they became they became hooked on the marijuana. And so that was the sort of underlying basis for the show. The producers of the show, you're correct, Mila Kunis and Ashton Kutcher were involved. Vitalik Buterin was also involved. Excuse my friend here who's just interrupted our podcast. So deciding he wants to get involved too when we're ta
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