Kraken Exits NFT Marketplace As OpenSea Battles SEC Scrutiny – FinanceFeeds

Kraken, one of the largest cryptocurrency exchanges, will close its NFT marketplace to reallocate resources toward upcoming projects.
As of November 27, 2024, users will no longer be able to list, bid, or sell items on the platform. The marketplace will fully shut down on February 27, 2025, allowing users only to withdraw their assets.
Kraken said the decision was driven by a need to prioritize other projects. “We’ve made the decision to close our NFT marketplace so we can shift more resources into new products and services, including unannounced initiatives in development,” a Kraken representative said.
The exchange assured users that its team would assist them in transferring NFTs to their Kraken Wallet or a self-custodial wallet of their choice.
Kraken initially revealed plans for its NFT marketplace in December 2021, launching the platform in beta by November 2022. Despite its early promise, the marketplace struggled to maintain momentum amid a broader decline in NFT sales.
Weekly NFT trading volumes have not exceeded $200 million since April 2024, according to The Block’s Data Dashboard, with most of the market remaining stagnant despite occasional spikes for specific projects like CryptoPunks.
The move comes shortly after NFT marketplace OpenSea received a Wells notice from the U.S. Securities and Exchange Commission (SEC), indicating the regulator’s intent to pursue an enforcement action.
OpenSea CEO Devin Finzer stated that OpenSea will contest the notice and pledged $5 million to cover legal fees for NFT creators and developers who may receive similar notices. He added that “every creator, big or small, should be able to innovate without fear.”
Finzer referred to a lawsuit filed by two NFT artists in Louisiana seeking clarification on whether their projects would be considered securities, arguing that regulatory uncertainty could deter creators from producing digital art.
OpenSea’s receipt of a Wells notice suggests that the SEC might consider NFTs as securities, moving into legally uncharted territory. This comes after the SEC took action against NFT projects like Impact Theory and Stoner Cats in 2023, accusing them of violating securities laws. Both cases were settled, but the actions caused uncertainty and concern within the NFT community.
The recent enforcement actions, along with class-action lawsuits against other NFT companies, led to hesitation among creators and businesses. For example, DraftKings recently shut down its NFT business, citing “recent legal developments.”


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