The ongoing evolution of regulatory frameworks surrounding cryptocurrency has profoundly impacted the industry, and few understand this dynamic better than Devin Finzer, co-founder and CEO of OpenSea. In a recent interview with Cointelegraph, Finzer emphasized that the Securities and Exchange Commission’s (SEC) enforcement tactics, particularly during the Biden administration, have cast a long-term regulatory overhang that disproportionately targets reputable players in the crypto space, including OpenSea.
Finzer stated, “There’s all sorts of digital assets; you shouldn’t treat them all the same. That’s obvious. But the approach that the prior SEC was taking was kind of very generic.” This criticism highlights the need for a more nuanced approach to regulation, acknowledging the diversity of digital assets.
In 2024, the SEC issued a Wells notice to OpenSea, indicating potential enforcement actions against the NFT marketplace for allegedly operating as an exchange for unregistered securities. Finzer responded by criticizing what he termed “regulation by enforcement,” affirming that OpenSea was prepared to challenge such allegations head-on.
With the anticipated changes in leadership at the SEC under Chair Paul Atkins, Finzer expresses a cautious optimism for a more balanced regulatory environment. “Good crypto regulation needs to balance protecting consumers while preserving the ability to innovate,” he remarked, stressing that a one-size-fits-all approach will not suffice.
The regulatory landscape is shifting, particularly following a period of heavy enforcement actions initiated during former Chair Gary Gensler’s tenure. The SEC has since relaxed its scrutiny of several crypto firms, withdrawing legal challenges against notable exchanges like Coinbase and Kraken, and concluding investigations into NFT companies such as Yuga Labs and OpenSea.
As the U.S. heads into the 2024 election cycle, the crypto industry’s political engagement and financial contributions to pro-crypto candidates are facilitating further dialogue on the future of regulation. The industry clearly bolstered the election of candidates, including those supporting the notion of the U.S. as “the crypto capital of the planet.”
Related: Crypto’s debanking problem persists despite new regulations
NFTs: Navigating Challenges and Embracing Innovation
The SEC’s aggressive stance contributed to a downturn in crypto markets, particularly following the FTX collapse in November 2022, which deterred investors from engaging with crypto products, including non-fungible tokens (NFTs). This tumultuous environment saw NFT trading volume plummet from its 2021 highs, significantly impacting platforms like OpenSea.
In response to these market challenges, OpenSea enacted significant changes to its workforce in 2023, laying off 50% of its staff. However, Finzer remains optimistic about the NFT sector’s potential for growth, citing ongoing innovation and applications, particularly in gaming and art collectibles. OpenSea is also diversifying its offerings to broaden its appeal beyond NFTs.
Finzer articulated a fundamental belief in the transformative power of digital ownership: “For the first time in the history of the internet, people have the ability to own digital stuff in a real way. You can move them around between different applications and take them with you wherever you go on the internet, and that’s something really powerful.”
Related: OpenSea denies NFT airdrop rumors, calls website a test page
