cryptojournalist
Two OpenSea users have ended their lawsuit claiming the NFT marketplace sold them unregistered securities. This happened after a Florida judge ruled in favor of OpenSea’s request to handle the issue through arbitration—a private process for resolving disputes—meaning the case won’t go to court.
OpenSea argued that, under its terms of service, all user disputes must be settled through arbitration, even the decision about whether a case qualifies for arbitration. The company also made it clear it would appeal if arbitration was denied. According to Adam Moskowitz, the users’ attorney, they “had no choice” but to drop the case after this ruling. He explained that they’d hoped the case could help define a clearer framework for regulating NFTs, especially as new rules for the industry are coming up. Despite the dismissal, he added, they’re still working on ways to support NFT buyers affected by flawed digital assets.
Originally, the lawsuit alleged OpenSea sold NFTs as unregistered securities, which are illegal to sell without meeting specific regulatory requirements. The complaint referenced past SEC enforcement actions against other NFT projects that were similarly classified as securities. The plaintiffs argued that OpenSea’s policies didn’t offer enough protection for users against these kinds of risks.
