(Bloomberg) -- Nonfungible token marketplace OpenSea said it has received a Wells Notice from the US Securities and Exchange Commission, indicating the regulator’s intention to sue the company.

Most Read from Bloomberg

• Turkey Plans Istanbul Taxi Surge to Tackle Complaints

• Intergenerational Housing Could Help Older Adults Combat Loneliness

• As Rural Hospitals Shutter Maternity Wards, Urban Ones Follow

• Nazi Bunker’s Leafy Makeover Turns Ugly Past Into Urban Eyecatcher

• A Loud Warning From the Past About Living With Cars

The agency alleged the tokens on its platform are unregistered securities, OpenSea Chief Executive Officer Devin Finzer said in a blog post Wednesday. The SEC does not comment on the existence or nonexistence of a possible investigation, an agency spokesperson said.

The notice would represent the latest in a string of enforcement actions brought by the SEC against the crypto industry in recent years. Companies including Kraken, Coinbase, Consensys and Uniswap have all been targets of such notices or lawsuits in the past, with some still engaged in legal proceedings.

The SEC earlier charged Impact Theory LLC, a media and entertainment company headquartered in Los Angeles, with offering unregistered securities in the form of NFTs in August last year. It also settled with Stoner Cats 2 LLC — the creators of the online animated cartoon funded through sale of NFTs — with offering unregistered securities; the company agreed to pay a $1 million fine and to a cease-and-desist order.

In the blog post, OpenSea mentioned the Stoner Cats case as an example of the agency going after artists, and said it is pledging $5 million to cover legal fees of NFT artists and developers who receive a Wells notice.

“We hope that the SEC will reconsider its stance and approach this issue with the open-mindedness it deserves,” the New York-based company’s blog said. “Until then, OpenSea remains committed to standing up for our vision of a better internet—one that empowers individuals and fosters creativity, rather than stifling it with unnecessary regulatory burdens.”

A year ago, OpenSea’s former head of product was convicted of insider trading, and the company drew heavy criticism for eliminating mandatory royalties for NFT creators on its platform. The startup laid off 50% of its staff in November.

During the last bull market, OpenSea was the biggest NFT marketplace. It has since lost market share to rivals such as Blur and Magic Eden. Still in the last 30 days, OpenSea posted higher sales volume than rivals, according to tracker DappRadar.

While NFT sales inched up earlier this year, they’ve slackened since June. Former President Donald Trump issued his new, fourth NFT collection on Tuesday.

(Updates with company comments beginning in the fourth paragraph.)

Most Read from Bloomberg Businessweek

• How Rent Controls Are Deepening the Dutch Housing Crisis

• Hong Kong’s Old Airport Becomes Symbol of City’s Property Pain

• Far-Right ‘Terrorgram’ Chatrooms Are Fueling a Wave of Power Grid Attacks

• US Tech Is Holding Back Some AI Products From Europe

• Losing Your Job Used to Be Shameful. Now It’s a Whole Identity

©2024 Bloomberg L.P.