Ripple CLO Unveil Why the US SEC Could Face Defeat in a Lawsuit Against OpenSea
The recent comments made by Ripple’s Chief Legal Officer, Stuart Alderoty, have sparked discussion in the crypto market community. Alderoty pointed out that there are strong grounds for the US Securities and Exchange Commission (SEC) to face another legal setback if it chooses to take legal action against OpenSea and considers non-fungible tokens (NFTs) as securities.
Ripple CLO Compelling Case For US SEC
Referencing a 1976 precedent where the SEC ruled that art galleries selling artworks with investment motives did not need to register as securities dealers, Alderoty argued that this historical ruling could be applicable to the current situation with OpenSea. He cited a specific case involving Art Appraisers of America, which was exempt from SEC registration despite selling lithographs with investment potential. The ruling clarified that art sales, even when connected to investment potential, are not subject to securities law if galleries do not guarantee resale value or create an artwork market.
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Alderoty pointed out that this precedent aligns with OpenSea’s business model, which revolves around digital art rather than investment instruments. This argument challenges the SEC’s position that NFTs should be automatically classified as securities.
SEC Faces Criticisms
In response to the SEC issuing a Wells Notice to OpenSea, CEO Devin Finzer expressed surprise and disappointment, stating that the Commission’s approach unfairly targets artists and creators on the platform. This move has attracted criticism from various quarters, including US Congressman Wiley Nickel, who denounced the SEC’s “regulation by enforcement” strategy. Additionally, billionaire Mark Cuban criticized SEC Chair Gary Gensler for mishandling regulatory oversight.
The comments from Alderoty and the wider backlash against the SEC reflect growing frustration with the agency’s approach to digital assets.
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Kayode Michael is a seasoned cryptocurrency analyst, successful trader, and skilled writer with a strong command of cryptocurrency analysis and price action. He leverages his technical analysis skills to provide valuable insights into emerging market trends and potential opportunities for investors to make informed decisions.
