The crypto industry found itself in an increasingly familiar position this week: on the defensive, banding together to fight back against encircling government forces.
The latest cycle of drama kicked off in full force late last weekend, when the French government abruptly arrested Telegram CEO Pavel Durov as he stepped off his private jet in Paris.
Immediately, crypto and decentralization advocates emerged as some of the strongest voices to defend Durov—who has himself recently turned Telegram into a major hub of on-chain activity and crypto transactions.
France has fallen to fascism (again).
Build in a country like El Salvador.
Where crime is low.
And coding isn't a crime. https://t.co/kccOSzKIlV— Balaji (@balajis) August 25, 2024
Even Elon Musk jumped into the discourse to throw his support behind Durov.
#FreePavel
pic.twitter.com/B7AcJWswMs— Elon Musk (@elonmusk) August 25, 2024
The pushback against the French government—and French president Emmanuel Macron specifically—was so great that Macron took to Twitter to defend his pro-technology reputation and insist that he had nothing to do with the arrest.
I have seen false information regarding France following the arrest of Pavel Durov.
France is deeply committed to freedom of expression and communication, to innovation, and to the spirit of entrepreneurship. It will remain so.
In a state governed by the rule of law,…
— Emmanuel Macron (@EmmanuelMacron) August 26, 2024
But the subject of Durov’s prosecution continued to snowball over the course of the week, becoming a focal point—and rallying cry—for Crypto Twitter. A community organization representing developers and users of The Open Network , Telegram’s blockchain of choice, soon drafted a letter demanding Durov’s release. It has subsequently received over 4.3 million signatures.
?????, ??? ??????? ???????? ? ????? ?? ??? ???? ?????????? ?? ???? ?????? ?? #FREEDUROV .
An Open Letter Mini App in Telegram.
Anyone who values privacy and freedom of speech should sign this letter to French… pic.twitter.com/i46ohO7F9G
— TON Society ? (@ton_society) August 27, 2024
On Wednesday, Durov was indeed released—after being charged by Parisian prosecutors with numerous crimes related to his alleged refusal to remove illegal content from Telegram. He is currently barred from leaving France as he awaits trial.
BREAKING: Telegram CEO Pavel Durov released on €5,000,000 bail and is forbidden from leaving France.
F**king insane.
Durov is also being forced to check in at a police station twice a week.
Durov is facing six charges because of his "refusal to communicate, at the request of… pic.twitter.com/rGV1TVVAnu
— Collin Rugg (@CollinRugg) August 28, 2024
But that’s only half the drama. On Wednesday, OpenSea CEO Devin Finzer announced that the NFT marketplace had become the latest crypto company to receive a Wells Notice from the U.S. Securities and Exchange Commission (SEC). The notice indicates that it will likely soon be sued by the regulator.
OpenSea has received a Wells notice from the SEC threatening to sue us because they believe NFTs on our platform are securities.
We're shocked the SEC would make such a sweeping move against creators and artists. But we're ready to stand up and fight.
Cryptocurrencies have long…
— Devin Finzer (dfinzer.eth) (@dfinzer) August 28, 2024
The outcry on Crypto Twitter was swift and far-reaching. While all sorts of crypto projects and firms have already been sued by the SEC, the OpenSea development indicated that the regulator could go after the heart of the NFT world, an unprecedented and eyebrow-raising escalation.
NFT creators and politicians alike lambasted the move, which appears to have set up an all-or-nothing battle over the fate of the American NFT market.
Jonathan Mann, a musician who releases a new song every day as an NFT—and who also preemptively sued the SEC over its NFT stance last month—dedicated a song this week to the news.
I've been writing a song a day for 16 years and 240 days.
The SEC's action against @opensea just shows that @brianlfrye and I are doing the right thing in taking the fight to THEM.
?THIS IS EXACTLY WHY WE ARE SUING THE SEC? pic.twitter.com/aDWqH6Bb8G
— 16 years of song a day (@songadaymann) August 28, 2024
And Wiley Nickel, a pro-crypto House Democrat, decried the move, despite it sourcing from within his own political party.
The aggressive use of “regulation by enforcement” from @SECGov is a blatant abuse of power that erodes trust and transparency in our regulatory system.
This heavy-handed approach creates widespread uncertainty and threatens to derail the progress driving digital innovation in… https://t.co/6QSSEhjHBN
— Rep. Wiley Nickel ?? (@WileyNickel) August 28, 2024
Across Crypto Twitter, speculation flourished as to what an SEC assault on NFTs could mean for average crypto users. As to be expected, the feverish news cycle was ripe with memes.
You’re wearing an unregistered security as your profile picture, are you not? pic.twitter.com/FivimAVDIE
— laurence (@functi0nZer0) August 28, 2024
