News 
February 27, 2025 
4 min. 
The NFT space saw two major developments this week—one signaling relief and the other raising concerns. The U.S. Securities and Exchange Commission (SEC) has dropped its investigation into OpenSea, marking a victory for the marketplace and the broader NFT sector. Meanwhile, Illuvium Labs has cut 40% of its workforce in an effort to speed up game development.
SEC Closes Probe Into OpenSea
OpenSea’s Chief Executive Officer Devin Finzer has confirmed that the SEC investigation concerning the NFT marketplace has been officially closed. He claimed that this is a big victory for people who are building in space, stating that NFTs are definitely not securities as that would restrict progress in innovation.
In August 2024, the SEC opened an investigation and served OpenSea with a Wells notice which alleged that the platform was aiding the sale of securities without registration. For the industry, the decision to remove the case is certainly good as the legal cloud propositions surrounding NFTs will be significantly cleared.
Even though both companies are directly competing, Magic Eden’s Chief Business Officer Chris Akhavan was glad about the news for ‘the NFT space’ stating that both companies believe in the vision of NFTs. The closing of the case is positive for the industry, especially the unclear landscape on how NFTs will be treated in the future will change for the better.
Illuvium Labs Lays Off 40% of Staff to Speed Up Development
On the other hand, Illuvium Labs, the NFT gaming firm, has implemented deep workforce reductions, cutting headcount from 110 to 65 in order to become more efficient. According to CEO Kieran Warwick, the layoffs predominantly impacted marketing, operations, security, and quality assurance, and were made to improve the pace at which the game was being developed.
Warwick stated that while these decisions are never easy to make, Illuvium has worked well in the past with a smaller workforce. He noted that during the company’s initial stages, 50-60 employees were able to achieve a lot, but at the cost of long hours.
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This clearly shows the consequences blockchain gaming companies have to deal with as they try to adjust to the changing dynamics of the industry. This markets has proven to be volatile for investment, and according to some analysts in the field, the available funding is being poured into different projects which ultimately do not add value. One of the Gunzilla Games’ Web3 directors, Theodore Agranat, believes that at this time, the environment surrounding blockchain gaming resembles a “game of musical chairs” with regards to players moving from one project to another trying to seek whatever value can be found.
Although OpenSea’s legal victory provides hope for NFT platforms, the Illuvium case demonstrates other sides of the story in the Web3 gaming ecosystem. The industry is still young and companies continue searching for the best practices.
