Jonathan Mann and Brian Frye Sue the SEC, Calling Its Authority Over Digital Art Flawed

美國證券交易委員會（SEC）對加密貨幣產業日益嚴格的審查讓許多公司感到緊張。針對 Consensys 和 Coinbase 等產業巨頭的備受矚目的案件引發了人們對誰可能成為下一個監管目標的廣泛擔憂。

The Securities and Exchange Commission’s (SEC) increasing scrutiny over the crypto industry has left many firms on edge. High-profile cases against industry giants like Consensys and Coinbase have sparked widespread concern about who might be next in the regulatory crosshairs.

In an unexpected turn of events, the crypto community has found unlikely allies in its struggle against regulatory overreach. Two artists, Jonathan Mann and Brian Frye, known for selling their work as NFTs, have taken a proactive stance by suing the securities agency.

SEC Accused of Overstepping Mark

Mann and Frye’s lawsuit challenges the SEC’s authority over digital art. The artists argue that applying securities laws to digital artwork is as flawed as applying them to traditional art.

The lawsuit referenced recent SEC enforcement actions against NFT projects Impact Theory and Stoner Cats, which resulted in settlements of $6.1 million and $1 million, respectively, which the pair argued were wholly unjustified.

Accordingly, the pair stated that their ‘fear of an investigation or enforcement action by the SEC is well-founded,’ prompting them to file the lawsuit as a preemptive measure to avoid being sued by the agency.

In the filing, Mann and Frye contended that the Impact Theory and Stoner Cats NFTs did not constitute securities offerings. They argued that the tokens were not shares in the companies, did not pay any form of dividend, and did not represent a commitment to generate profits for NFT buyers.

The artists are seeking a declaratory judgment, which is used to define rights and obligations before any injury occurs. This approach is particularly relevant in areas of legal uncertainty, such as the gray area around digital artwork.

NFT Sales Sink

While Mann and Frye claimed the SEC’s stance on NFTs threatened the livelihood of artists experimenting with novel technologies, NFT sales have continued to decline.

Data from CryptoSlam paints a sobering picture for the NFT market. NFT sales for the week starting July 22 reached $96.3 million, a staggering 96% drop from the all-time high of $2.29 billion recorded in August 2021.

A brief resurgence in NFT sales in Q4 2023, fueled by overall crypto market optimism following the run-up to Bitcoin ETF approvals, offered hope. However, 2024 has seen this uptick reverse, with sales volumes trending downward.

Despite this, NFT advocates remain bullish on the technology’s future. “jprince.sol”, CEO of B+J Studios, pointed to the persistent use of NFT profile pictures as evidence of the format’s enduring appeal.

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