Several recent actions by the U.S. Securities and Exchange Commission (“SEC”) are paving the way for a possible resurgence of NFTs. The unsettled legal issue of whether under U.S. law NFTs constitute securities subject to complicated disclosure requirements has stifled the growth of this digital instrument. While the issue is not definitively settled, the SEC has now closed its investigation into the OpenSea marketplace without categorizing NFTs as securities.

This action is perceived as one of several wins for the cryptocurrency industry under the new Administration. The SEC is also dropping a lawsuit against Coinbase, a major cryptocurrency exchange and has stayed a separate lawsuit against Binance, another major cryptocurrency exchange.

While the crypto industry is celebrating, not everyone is happy. Robert Weissman, co-president of Public Citizen, an industry watchdog, has called the Coinbase action “a massive gift to the industry.”