The once-considered largest NFT platform in the world, OpenSea, is facing numerous run-ins with government agencies including the US Securities and Exchange Commission (SEC), Federal Trade Commission (FTC), and different tax authorities. Furthermore, there are still issues with the non-fungible tokens (NFTs) themselves as they are not as powerful as they once were in the market.
Its latest woes are still worsening amidst the recent rally of cryptocurrency, and this is despite both being tied to digital ledgers and based on the blockchain.
OpenSea Faces SEC, FTC, Tax Issues, and MORE Problems
(Photo : JUSTIN TALLIS/AFP via Getty Images)
The Verge reported about the many troubles over at OpenSea, as it faces pending litigation from the SEC, as well as a separate probe by the FTC, including tax issues with the United States and international entities.
However, the problems do not stop there for OpenSea. This is because the company is seeing significant competition in the industry from other up-and-comers, as well as its many workplace-related issues including gender discrimination and employees jumping ship.
Additionally, employees claimed that there were "shady" happenings within the company, as well as hiring executives from Big Tech companies to help improve their operations.
NFTs Remain at its Low Point Despite Crypto's Return
It was not an instant success for NFT, particularly as the first one was introduced in 2014 and it was only three years later that it became known. Moreover, it was not until 2020 that NFT gained traction in the market, with 2021 being its year.
The present is still a challenge for NFT, particularly as despite crypto's comeback, the token industry remains slammed.Unlike January 2022's $6 billion total monthly sales by volume, it is now below $430 million as of July 2024.
Much remains unknown for the future of NFTs, but OpenSea's problems are only beginning, especially with what it is facing with authorities now.
NFTs and Its Recent Performance in the Market
Amidst the COVID-19 pandemic, NFTs have made a name for themselves in the growing digital landscape, and it is known for seeing a massive wave of hype and trends that took over the world. Beeple remains at the apex of the NFT industry as the artist was able to sell a piece called "The Merge" for $91.8 million, but it was no longer followed by other tokens.
However, towards the end of 2022, its performance declined, and this was also during the time that cryptocurrency faced a bearish climate, with industries speculated to blow their "bubble." In 2023, analysts and reports claimed that 95 percent of the NFTs worldwide are already "worthless," and this meant massive losses for investors and those who purchased these during their all-time highs.
Multiple celebrities and endorsers, alongside different NFT companies and platforms, also faced lawsuits that claimed that they were frauds, with other customers wanting their money back.
OpenSea was once said to be the largest platform in the world, but now, the company is facing numerous scrutiny from government agencies, with their troubles not yet over as NFTs are yet to make a comeback in the industry.
