NFT Marketplace OpenSea Dodges Class-Action Lawsuit as Plaintiffs Voluntarily Dismiss the Case

According to Cointelegraph, two users of the non-fungible token (NFT) marketplace OpenSea have voluntarily dismissed their class-action lawsuit

Two users of the non-fungible token (NFT) marketplace OpenSea have voluntarily dismissed their class-action lawsuit, which accused the platform of selling unregistered securities, following a ruling by Judge Cecilia Altonaga in a Florida federal court allowing OpenSea to compel arbitration.

The plaintiffs, Anthony Shnayderman and Itai Bronshtein, filed for dismissal on November 7 after the judge's order last month.

OpenSea had maintained that the users were bound by its terms of use, which stipulate that all claims must be resolved through arbitration. In an October filing, OpenSea emphasized its intention to move the plaintiffs to arbitration and indicated it would appeal any court denial, effectively pausing the case. The NFT marketplace argued that users agree to resolve disputes through the alternative dispute resolution services provider JAMS.

The plaintiffs filed the lawsuit in September, alleging that the NFTs purchased on OpenSea were unregistered securities contracts in the United States and were worthless due to their illegal nature. They pointed to OpenSea's August disclosure of a Securities and Exchange Commission (SEC) Wells notice, suggesting potential liability for facilitating the exchange of unregistered securities. The suit also highlighted the SEC's actions against NFT projects Stoner Cats 2 and Impact Theory, where NFTs were deemed unregistered securities. The plaintiffs claimed that OpenSea breached a user warranty by failing to moderate its exchange for unregistered securities.

Adam Moskowitz, the attorney representing Shnayderman and Bronshtein, stated that they had no choice but to dismiss the case. He explained that their primary objective was to establish a framework for creating a functional global marketplace for NFTs, considering upcoming political and legislative changes. Moskowitz expressed hope that OpenSea could play a role in supervising and monitoring NFTs traded on its platform, from which it profits. He also mentioned ongoing efforts to assist victims of failed NFTs and other crypto products.

An OpenSea spokesperson dismissed the allegations as baseless, asserting that the lawsuit was unfounded and based on the disclosure of an SEC Wells notice. OpenSea did not immediately comment on the voluntary dismissal of the lawsuit.