Songadaymann Sues SEC After Using NFTs to Sell Songs He Writes Every Day

Jonathan Mann, known for creating a song every day for over sixteen years, and conceptual artist Brian L. Frye have filed a lawsuit lawsuit v. the U.S. Securities and Exchange Commission (SEC). The case focuses on whether NFTs representing digital art, such as those created by Mann and Frye, should be classified as securities under U.S. law. Mann, who has written some of the most iconic cryptocurrency related songs in the industry, wrote: “This song is a security” in protest.

Mann and Frye to discuss that their digital artworks, sold as NFTs, should not be subject to the extensive regulatory framework designed for traditional securities. Mann plans to launch a collection of 10,420 NFTs featuring exclusive remixes of his song “This Song Is A Security.” By comparison, Frye intends to offer 10,320 NFTs in his “Cryptographic Tokens of Material Financial Benefit” project.

Mann wrote in a declaration,

“I have now remixed this song specifically for the purpose of this lawsuit. I have recorded approximately 300 layers that will be programmatically combined into a total of 10,420 individual, unique remixes. This forms the basis of an NFT project that I am submitting to the court.”[…] The project cannot be released until the court rules in our favor.”

The plaintiffs allege that the SEC’s recent actions against other NFT projects, including the Stoner Cats and Impact Theory cases, unfairly extend securities regulations to digital art. They point out that the SEC’s broad interpretation of the Howey test—used to determine what constitutes an investment contract—threatens to encompass all forms of art and collectibles, not just NFTs. Mann and Frye are seeking judicial clarification to ensure that their art projects can proceed without being classified as securities, thereby avoiding potentially costly regulatory compliance or legal challenges.

Artists are concerned that the SEC’s approach, which lacks clear guidelines, could stifle creativity and innovation in the digital art space. They argue that selling art, whether physical or digital, should not require adherence to securities laws simply because the artworks may appreciate in value.

Mann further commented:

“NFTs have become a joke lately. It feels similar to 2017. Almost no one thinks there’s anything worth pursuing. But I still believe in NFTs! Beyond the hype of 2021, and beyond the fallow period we’re in now, the core idea that initially got me excited is still there.”

Mann and Frye’s lawsuit reflects broader anxieties within the digital art community about the SEC’s increasing scrutiny and the uncertain legal landscape surrounding NFTs. They claim that without clear boundaries, the SEC’s expansive view of its regulatory authority could have chilling effects on artists’ ability to engage with new technologies and monetize their work.

The outcome of this case could set a significant precedent for the treatment of NFTs under U.S. securities law, potentially impacting a wide range of digital artists and collectors.

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