In August, the SEC issued a Wells notice to OpenSea, the largest Ethereum-based NFT marketplace, signaling the regulator’s intention to take enforcement action.
Luca Schnetzler, better known as Luca Netz, the CEO of Pudgy Penguins, has shared his perspective on the United States Securities and Exchange Commission’s (SEC) increasing scrutiny of the NFT market, calling the regulatory actions “nonsense.”
During an interview with Cointelegraph at the Token2049 event in Singapore, Netz expressed his lack of concern over the SEC’s enforcement efforts targeting the NFT sector. According to him, despite how the asset class might be legally defined, NFTs at their core remain “just JPEGs.” His comments reflect a broader sense of frustration within the NFT community regarding the SEC’s treatment of digital assets.
SEC Takes Aim at NFT Platforms
In August, the SEC issued a Wells notice to OpenSea, the largest Ethereum-based NFT marketplace, signaling the regulator’s intention to take enforcement action. The financial watchdog claimed that some of the products sold on OpenSea could be classified as securities under the US law.
On Monday, September 16, the SEC also reached a settlement with Flyfish Club, a restaurant that offers exclusive memberships as NFTs. The regulator argued that Flyfish Club had conducted an unregistered offering of crypto asset securities, selling 1,600 NFTs to US investors and generating $14.8 million in revenue.
On Monday, September 16, the SEC reached a settlement deal with the company paying up to $750,000 in fine.
When asked about his thoughts on the SEC’s crackdown, Netz appeared largely indifferent. He pointed out that if the regulator is going after these companies, it should also target well-established names in the space such as Sotheby’s, Nike, and even Pokémon.
“For the space in general, I don’t really care. I mean, if you’re going to go after OpenSea, you got to go after Sotheby’s, you got to go after Nike, you got to go after Pokémon. At this point, this is just nonsense, right?” Netz said.
Accountability in NFT Space
He further explained that unlike cryptocurrencies, which often promise potential returns for investors, NFTs on platforms like OpenSea do not offer the same financial assurances. Netz emphasized that OpenSea, in particular, does not mislead buyers with false promises.
“OpenSea specifically, I think it’s in its own unique subsection where it’s like not selling people on a false promise or a dream. And so, for that reason, I’m not worried,” he explained.
He also argued that while regulatory agencies like the SEC prioritize investor protection, buyers must take personal responsibility when purchasing digital assets like NFTs. He believes that individuals should be held accountable for their financial decisions in the industry.
“Ultimately, there has to be a level of accountability. Whether you buy an NFT for $100,000 or $1,000, that’s your decision. No one is forcing your hand,” Netz concluded.
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