Magic Eden is facing backlash from its community following the announcement of plans to segregate its services for users based in the United States.
“Today we’re announcing the new magiceden.io for international users, plus magiceden.us for users in the United States,” ME said. “.US will still have great products you know and love while .IO will give us the ability to cook up (and sauté) even more features.”
Magic Eden is a popular website for buying, selling, and trading digital items called NFTs (non-fungible tokens). It was built on Solana but has become a multichain platform for fast transactions and low fees.
Magic Eden decided in response to the increasing regulatory scrutiny surrounding the cryptocurrency industry in the U.S., prompting the platform to take measures to ensure compliance with evolving regulations.
Under the new framework, certain features and functionalities in the marketplace will be restricted to U.S.-based users. Magic Eden said that while US users can still view NFTs, make offers, and complete transactions, they will lose access to key capabilities such as listing NFTs for sale, participating in primary sales, and accessing specific collections.
This limitation on US users has sparked outrage among members of the Magic Eden community, many of whom have expressed disappointment and concern about the potential negative impact on the platform’s growth and user engagement.
An X user, in response to the news, quipped that Magic Eden now makes services like airdrops inaccessible to US citizens “but is available for everyone else in the world who don’t have hostile regulations.”
The US NFT space has faced regulatory challenges from the Securities and Exchange Commission (SEC), in the last week of August 2024, the SEC issued a Wells Notice to OpenSea, one of the largest NFT marketplaces.
This notice indicates that the SEC is considering legal action against the company, alleging that certain NFTs traded on the platform may be classified as securities. This move suggests that the SEC views some NFTs as potentially unregistered securities and NFT marketplaces as possibly operating as unregistered securities exchanges.
OpenSea has responded to these allegations by vowing to contest them, arguing that NFTs are fundamentally creative goods rather than securities. Meanwhile, Magic Eden is implementing policy changes to avoid similar legal battles with the SEC.
