OpenSea Faces Class Action Lawsuit Over Bored Ape Yacht Club NFTs Deemed Unregistered Securities

According to a report by Cointelegraph on September 23, two users of the NFT platform OpenSea have initiated a class action lawsuit in a federal court in Florida. The plaintiffs, Anthony Shnayderman and Itai Bronshtein, allege that OpenSea sold unregistered securities in the form of NFTs, thus violating U.S. securities laws. The lawsuit mentions NFTs such as the Bored Ape Yacht Club series, which the plaintiffs argue have become “worthless” due to their “illegal nature.”

The plaintiffs support their claims with the U.S. Securities and Exchange Commission (SEC) Wells notice issued to OpenSea last month, suggesting the platform could be liable for facilitating transactions involving unregistered securities. The lawsuit also references prior successful SEC enforcement actions against NFT projects, including Stoner Cats 2 and Impact Theory. By invoking the Howey test, the plaintiffs contend that these NFTs qualify as investment contracts under U.S. law.

The plaintiffs accuse OpenSea of misleading users and violating user guarantees by listing NFTs that constitute illegal securities. According to the lawsuit, OpenSea failed to regulate these unregistered securities adequately. As of now, OpenSea has not issued any public response to the lawsuit.