Multiple pro-crypto voices have criticized the Wells Notice issued to NFT Market OpenSea on Aug. 28, as the SEC’s crackdown on the crypto industry continues.

OpenSea was named next on the Securities and Exchange Commission’s list shortly after reports suggested Democratic candidate Kamala Harris might adopt crypto-friendly policies.

News of OpenSea receiving a Wells Notice indicates that the SEC’s campaign against the crypto sector persists. This contrasts with Vice President Harris’s recent economic agenda announcement.

The SEC’s Wells Notice implies OpenSea may face legal action for allegedly violating federal securities laws by facilitating the sale of non-fungible tokens (NFTs) or digital collectibles through its platform.

OpenSea, launched in 2017, gained significant traction during the NFT boom of 2020/2021. The digital art collections on the NFT marketplace have often been compared to traditional trading cards like Baseball and Pokemon, but with web3-inspired art issued on decentralized networks such as Ethereum.

OpenSea CEO has vowed to fight the SEC’s Wells Notice, while industry leaders, including Uniswap CEO Hayden Adams, have criticized the SEC’s stance that digital art becomes a security when it’s on a blockchain.

OpenSea has committed to a $5 million legal relief package for creators. MonkeDAO lawyer Ariel Givner has sought to reassure creators by downplaying fears of direct litigation against individual artists. Coinbase CEO Brian Armstrong expressed a positive outlook on crypto firms facing SEC scrutiny.

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The industry has largely condemned the SEC’s move as another instance of “regulation by enforcement.” Speculators also pointed out that OpenSea’s Wells Notice came less than a day after former President Donald Trump released his fourth NFT collection.

The news did little to boost Harris’s odds on Polymarket, with Trump taking a slight lead. Wagers on the 2024 Presidential Election remain closely contested on the Polygon-based predictions market. This latest SEC action may further strain relations between a potential Harris presidency and a crypto industry that has invested $119 million in lobbying this year.

Critics question why other entities like Sotheby’s, Nintendo, Rolex, or Valve have not received similar notices for selling art, games, watches, or digital skins, respectively. The specific targeting of NFTs due to their on-chain nature remains a contentious issue.

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