Coinbase’s political advocacy group, Stand With Crypto, has established the Creator Legal Defense Fund to promote non-fungible token (NFT) initiatives.
The $6 million fund, funded by venture capital firm a16z and NFT marketplace OpenSea, is in reaction to increased regulatory scrutiny, including a Wells notice issued to OpenSea by the US Securities and Exchange Commission.
The fund’s goal is to defend the crypto community and urge creators to resist “misguided actions from the SEC.” Leading law firms such as Fenwick & West LLP, Goodwin Procter LLP, and Latham & Watkins LLP offer crucial legal support to those working in the blockchain and NFT fields.
The cryptocurrency community and US lawmakers continue to criticize the SEC’s “regulation by enforcement” strategy. In 2022, the agency filed its first case against an NFT issuer, charging a Los Angeles-based media corporation with marketing unregistered securities using NFTs, which resulted in a $6 million settlement. The regulator has also accused large crypto platforms, such as Coinbase, Binance, and Kraken, of breaking securities regulations.
Coinbase has established itself as a key champion for the crypto business, founding the Stand With Crypto project in 2023 and donating millions to Fairshake, a political action committee that supports the crypto industry.
Current events are taking place during a significant decline in the NFT business, with 96% of NFT projects dead. Unfair regulatory pressure could exacerbate these issues, potentially escalating the trend.
