Two OpenSea users have filed a class-action lawsuit against the NFT marketplace, accusing it of selling unregistered securities. The lawsuit, filed by Itai Bronshtein and Anthony Shnayderman in a Florida federal court, centered on the NFTs they acquired through OpenSea, including from the Bored Ape Yacht Club collection.
SEC Wells Notice Cited in OpenSea’s NFT Case
In their claim, the plaintiffs pointed to OpenSea’s disclosure of a Wells notice from the US Securities and Exchange Commission (SEC). This notice suggests that the SEC could take action against OpenSea, claiming that the platform facilitated the exchange of unregistered securities.
Shnayderman and Bronshtein argued that OpenSea failed to moderate its platform correctly and allowed the sale of securities in the form of NFTs. Their lawsuit also referred to recent SEC actions against NFT projects, including Stoner Cats 2 and Impact Theory, where the regulator classified the NFTs as unregistered securities.
The lawsuit claimed that these digital collectibles they purchased met the criteria for securities based on the Howey test. According to US securities law, security involves an investment in a joint enterprise with an expectation of profits from the efforts of others.
Shnayderman and Bronshtein claimed that the NFTs they bought fit this description, making OpenSea liable for selling unregistered securities.
Profiting from Unregistered Securities
The plaintiffs also accused OpenSea of unjust enrichment, stating that the platform profited in fees despite knowing that NFTs were sold as unregistered securities. The lawsuit further claimed that OpenSea assured users it would moderate its marketplace to ensure it did not allow the sale of unregistered securities.
Shnayderman and Bronshtein argued that the platform breached this warranty. Adam Moskowitz, managing partner of The Moskowitz Law Firm and counsel for Shnayderman and Bronshtein, said these collections should be sold in a well-regulated environment.
He added that he could work with OpenSea to create a process that benefits NFT enthusiasts and the broader crypto industry. Currently, OpenSea has not responded to the lawsuit or the accusations raised by the plaintiffs.
NFT Sales Drop to $73.7M
Notably, this market has experienced a 4.2% decline in sales volume over the last week, dropping to $73.7 million. This drop follows a brief increase the previous week when sales of these digital collections surged by 7.68%.
However, the number of NFT buyers has surged. Data from Cryptoslam indicates that 521,640 buyers participated in the market, while sellers totaled 270,413.
While NFT buyers are up 132%, NFT transactions decreased sharply, with a 26% drop in the past week, recording 1,217,967 total transactions. This mixed data points to a shifting dynamic in the NFT market.
Ethereum-based Collections Maintain Dominance
Meanwhile, Ethereum has maintained its status as the dominant blockchain for NFT sales, totaling $23.9 million. However, Ethereum-based digital collectibles saw a 9.6% decline compared to the previous week.
In comparison, Solana-built digital collections also performed well, taking the second spot with $16 million in sales. The Solana blockchain saw a 17.89% increase in sales volume, showing more robust market traction than Ethereum.
Bitcoin-based digital collectibles followed closely with $13 million in sales, while Polygon and Binance Coin were next with $7.5 million and $3.3 million, respectively. Wash trading was lowest on Binance Coin, while Solana and Bitcoin recorded 6.41% and 4.54% of wash trades.
Guild of Guardians Leads Top Collections
Among the top NFT collections, Guild of Guardians, hosted on the Immutable-Zk chain, took the lead with $2.86 million in sales from 5,786 transactions. DogeZuki on Solana followed with $2.4 million in sales from 61,447 transactions, showing continued interest in the collection.
The third spot went to Sorare, a collection on the Ethereum network, with $2.368 million in sales and 108,690 transactions. CryptoPunks, a widely recognized collection, secured $2.2 million in sales with only 25 transactions, placing it fourth on the list.
DMarket, built on the Mythos blockchain, closed the top five with $2.1 million in sales across 80,713 transactions. Other notable sales in this market during the week included CryptoPunks #1219, which sold for $308,316.94, and Autoglyphs #337, which sold for $223,153.25.
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