Coinbase, a leading advocate for the crypto industry, has taken another bold step in defending blockchain innovation. Through its political advocacy group, Stand With Crypto, the company announced the creation of a legal defense fund specifically for non-fungible token (NFT) projects, offering vital protection against increasing regulatory scrutiny in the U.S.
$6 Million Defense Fund for NFT Creators
Revealed in a post on September 13 via the X platform, the new Creator Legal Defense Fund is a $6 million initiative backed by major players in the crypto and venture capital space, including a16z and NFT marketplace OpenSea. The fund also has support from prestigious law firms such as Fenwick & West LLP, Goodwin Procter LLP, and Latham & Watkins LLP.
Stand With Crypto’s website underscores the need for such a fund, citing growing threats from the U.S. Securities and Exchange Commission (SEC) against artists and blockchain innovators. The SEC recently issued a Wells notice to OpenSea, signaling the agency’s intention to pursue legal action, claiming the platform sold unregistered securities.
Protecting the Crypto Community
According to the advocacy group’s announcement, “those looking to build on blockchain technology will continue to face significant legal threats and challenges.” In response, Stand With Crypto said it was “raising its shield” to defend a fundamental part of the crypto community, allowing creatives to stand against what it calls “misguided actions” by the SEC.
NFTs, which represent ownership of unique digital assets like art, music, or videos, have typically been viewed as collectibles rather than traditional securities. Despite this, the SEC has ramped up enforcement against NFT platforms like OpenSea, sparking concern among artists and creators who rely on blockchain technology.
The Broader Regulatory Landscape
The cryptocurrency sector has been in the crosshairs of U.S. regulators for some time, with exchanges such as Coinbase, Binance, and Kraken facing legal challenges from the SEC for alleged securities law violations related to fungible tokens, including Solana’s native token. The SEC has stated that investors in crypto assets sold as securities deserve the same protections as traditional securities investors.
Coinbase, in particular, has emerged as one of the most outspoken defenders of the crypto industry. In 2023, the exchange launched Stand With Crypto, which focuses on political advocacy for pro-crypto policies. The organization has also ranked political candidates based on their support for the crypto space, assigning former President Donald Trump an ‘A’ rating while reserving judgment on Democratic candidate Kamala Harris, who entered the race in August after President Joe Biden stepped down due to health concerns.
Political Advocacy and Influence
Stand With Crypto has not only offered legal protection but also taken a proactive role in shaping U.S. crypto policy. The group has donated millions to Fairshake, a political action committee (PAC) dedicated to advancing pro-crypto legislation. According to Open Secrets, a campaign finance watchdog, Fairshake spent approximately $93 million in the year leading up to August 2024 in an effort to influence the upcoming election cycle.
By creating the Creator Legal Defense Fund, Coinbase is doubling down on its efforts to support blockchain innovators, ensuring that NFT creators have the legal resources they need to defend themselves against ongoing regulatory pressures.
