The Moskowitz Law Firm has filed yet another class-action lawsuit against a cryptocurrency firm, this time accusing OpenSea of selling NFTs as unregistered securities to its customers.
The lawsuit, filed in a Florida federal court, alleges that two residents of Florida suffered financial losses after purchasing NFTs on OpenSea, a popular platform for buying digital art and collectibles during the NFT market boom in 2021 and 2022.
Adam Moskowitz, Managing Partner at Moskowitz Law Firm, stated, “We have gained valuable insights from our extensive experience in crypto litigation. In today’s rapidly changing regulatory environment, there needs to be a structured process for selling NFTs in a regulated manner.”
The Miami-based law firm is currently involved in legal battles with various crypto companies and their affiliates, including FTX, several celebrities who endorsed a failed crypto exchange, Shaquille O’Neal over his Astrals NFT project, and Cristiano Ronaldo for promoting the crypto exchange Binance.
The latest lawsuit against OpenSea alleges that the platform engaged in deceptive practices to enrich itself by charging fees on NFT transactions. The plaintiffs believed that NFTs sold on OpenSea were registered securities based on the representations made by the platform.
While the lawsuit does not specify the damages resulting from NFT purchases, it argues that NFTs can be considered securities under the definition of investment contracts. The SEC has previously made similar claims, stating that NFT purchasers expect profits from the efforts of others.
Moskowitz’s lawsuit comes after OpenSea disclosed receiving a Wells notice in August, indicating that the SEC may take legal action against the platform. OpenSea CEO Devin Finzer expressed concerns about the SEC treating NFTs as securities, highlighting the potential risks for artists.
NFTs can represent ownership of various assets, including domain names, trading cards, and event tickets. SEC Commissioners have criticized the regulator’s approach to NFTs as overly restrictive.
Despite the criticism, Moskowitz’s lawsuit argues that the SEC’s stance on cryptocurrency has been consistent. The law firm recently saw a partial victory in the case against Shaquille O’Neal, and now points to OpenSea as a platform where NFTs from O’Neal’s Astrals project were traded.
OpenSea has not yet responded to requests for comment from Decrypt.
Edited by Andrew Hayward