On September 14, OpenSea received a Wells Notice from the US Securities and Exchange Commission (SEC) last month. While regulators have previously taken enforcement actions against NFT projects, the disclosure against OpenSea indicates that the SEC has started scrutinizing entities that provide trading platforms for NFTs, not just the entities that initially offer them.

Magic Eden has not yet become a target of the SEC, but its CEO, Lu, acknowledges that the lawsuit against OpenSea could have a broad impact on the cryptocurrency space, which remains relatively untouched by regulators compared to exchanges or cryptocurrency issuers. "Regulatory uncertainty is basically a given," said Lu. "If this event can bring some clarity to the space, I welcome it."