The U.S. Securities and Exchange Commission (SEC) and its Chairman Gary Gensler have been criticized by crypto and blockchain industry leaders and advocacy groups for sending a Wells notice to NFT marketplace OpenSea.

OpenSea CEO Devin Finzer reported on Aug. 28 that the SEC had warned the NFT platform of a potential enforcement action. This was one of the rare cases where the U.S. regulator would consider treating an NFT as an unregistered security.

Ji Kim, chief legal and policy officer at the Crypto Council for Innovation (CCI), said the SEC’s claim to regulate NFT platforms as securities exchanges is legally flawed.

Finzer said that if the SEC takes enforcement action, it will fight it and will cover up to $5 million in legal fees for similarly situated NFT creators and developers.

Since joining the commission in 2021, Gary Gensler has taken enforcement actions against a number of crypto and blockchain firms, including Binance, Coinbase, Ripple, and Kraken. Although Gensler’s term ends in June 2026, many are calling for U.S. presidential candidates to take a stance on Gensler’s term.

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