Crypto Rallies Behind Artists Who Sued SEC Over NFT Regulatory Jurisdiction

Two nonfungible token (NFT) artists have filed a complaint against the U.S. Securities and Exchange Commission (SEC), asking the court to provide clarity about whether NFTs fall under the jurisdiction of Wall Street's largest regulator.

A case of 'art'

Law professor Brian Frye and Jonathan Mann, the songwriter of "Song a Day Mann," filed the lawsuit Monday, with their lawyers saying the complaint is "about art." The complaint asked the court to clarify whether the SEC should regulate art and whether artists were supposed to "register" their artworks before selling the pieces to the general public.

The complaint also asked whether artists should be "forced to make public disclosures about the 'risks' of buying their art," and whether artists should be "required to comply" with federal securities laws. "It would have been ridiculous" to require great American artists such in the past to register their paintings, the filing noted.

The plaintiffs alleged that the SEC has waged a "campaign to assert jurisdiction over sales of digital art, which should ring alarm bells for every artist and patron in America." The lawsuit reiterated that Frye and Mann were artists who create art to be sold in the form of NFTs, which the plaintiffs' lawyers described as "digital assets that can take the form of art, music, videos, and in-game items, among many other things."

Mann has released a video featuring his journey of filing the complaint against SEC.

Crypto rallies in support of Frye and Mann

Some of the cryptocurrency industry's experts have taken to X to express support for the artists, including Katherine Minarik, the chief legal officer of Uniswap Labs, the company behind the Uniswap Protocol.

Minarik noted that the SEC has become "broken" enough in its "arbitrary and unlawful" application of securities laws that artists are now "compelled" to file a lawsuit so they can protect their livelihoods.

The Blockchain Association, a collective crypto group that includes some of the biggest digital asset firms, asserted that the SEC has no authority over NFT art. "We support the plaintiffs in their quest for legal clarity," the group said.

Bob Summerwill, the executive director of the ETC Cooperative, said Frye and Mann have taken on a "noble fight."

NFTs still of interest

News of the lawsuit came as NFTs retain the interest of investors, even as other tech sectors appear to have become the new thing and sales declined. The latest data showed that investors are still heavily invested in NFTs as new artists and derivative products continue to emerge.