OpenSea CEO Criticizes SEC's Crypto Approach

Devin Finzer, co-founder and CEO of OpenSea, has criticized the Securities and Exchange Commission's (SEC) approach to crypto regulation, describing it as creating a significant "regulatory overhang" within the industry. In an interview, Finzer stated that the SEC unfairly targeted numerous well-intentioned companies, including OpenSea, during the Biden administration.

He argued for a more nuanced approach, stating, "There are all sorts of digital assets; you shouldn't treat them all the same. The SEC's previous approach was overly generic."

OpenSea received a Wells notice in 2024, a precursor to potential enforcement action, alleging it operated as an unregistered securities exchange. Finzer criticized the SEC's "regulation by enforcement" tactic and vowed to fight back.

Shift in Regulatory Outlook?

With the appointment of Chair Paul Atkins, Finzer expresses optimism for a more balanced regulatory framework. He advocates for regulations that protect consumers while fostering innovation, emphasizing that a "one-size-fits-all" approach is unsuitable.

Under the Trump administration, the SEC scaled back enforcement, withdrawing challenges against several prominent crypto firms, including Coinbase, Kraken, Yuga Labs, OpenSea, and Uniswap – many of which were initiated under former Chair Gary Gensler. The SEC also dropped its long-running case against Ripple.

The Impact on the NFT Market

The SEC's crackdown contributed to a market downturn following the FTX collapse in November 2022, significantly impacting NFT trading volume. Volume has plummeted from its 2021 peak, forcing OpenSea to lay off 50% of its staff in 2023. Despite this, Finzer highlights the continued innovation in the NFT space, particularly in gaming and art collectibles.

OpenSea is diversifying beyond NFTs, recognizing the broader potential of on-chain trading. Finzer emphasizes the transformative power of digital asset ownership: "For the first time in internet history, people can truly own digital assets, moving them between applications and retaining ownership."

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OpenSea CEO Criticizes SEC's Crypto Approach