PANews reported on September 23 that according to Cointelegraph, two OpenSea users have filed a class action lawsuit against the NFT market OpenSea in the United States, claiming that it sold unregistered securities contracts. Anthony Shnayderman and Itai Bronshtein claimed in a lawsuit filed in a Florida federal court on September 19 that the NFTs they purchased on OpenSea (including the once high-priced Bored Ape Yacht Club series) became worthless "due to their illegal nature."
In their arguments, the duo noted that OpenSea disclosed a Wells Notice from the SEC last month, which they claim âis an indication that OpenSea is in trouble and could be found liable for facilitating the trading of unregistered securities.â The lawsuit also points to successful actions taken by the SEC against NFT projects Stoner Cats 2 and Impact Theory, where the regulator said the NFTs were unregistered sales of securities. The duo claims that the Howey test for defining securities suggests that the NFTs they purchased on OpenSea are investment contracts under U.S. securities laws, claiming that they are investments in a common enterprise and that profits could reasonably be expected from the efforts of others. The lawsuit alleges that OpenSeaâs NFT listings were âdeceptive and misled plaintiffs into purchasing worthless and illegal unregistered securitiesâ because OpenSea said it âregulates the NFTs on its exchange.â They also allege that the company âunjustly enrichedâ by charging fees and accepting funds that âthe company knew or should have known were derived from the sale of unregistered securities.â
Adam Moskowitz, the duoâs attorney and managing partner at Moskowitz Law Firm, said: âWith todayâs ever-changing regulations, there should be a process for selling NFTs in a well-regulated environment.â Moskowitz added: âWe look forward to working with OpenSea to build the best path and future process for consumers and the crypto industry.â