The digital asset landscape faces ongoing regulatory questions, and now OpenSea is directly engaging with the United States Securities and Exchange Commission (SEC). The core issue? Whether NFT marketplaces should be officially designated as exchanges or brokers under existing US securities laws.
OpenSea has formally requested the SEC to clarify that NFT platforms, like itself, don’t meet the criteria to be classified as exchanges under federal regulations. Their argument centers on the unique nature of NFTs and how transactions are handled.
[letter]OpenSea argues that NFT platforms don’t fit the legal definition of an exchange or broker because they don’t handle transactions, act as intermediaries, or bring together multiple sellers of the same asset.
The platform contends that NFT marketplaces differ significantly from traditional exchanges. A key point is that most NFTs represent unique digital assets, typically involving only a single seller for each token. This inherent non-fungibility, they argue, distinguishes these assets from the fungible securities that the regulatory framework was designed to oversee. The distinction is important for the future of DeFi and blockchain based assets.
Furthermore, OpenSea emphasizes that all NFT transactions occur directly on the blockchain via smart contracts, independently of the OpenSea platform itself. Users maintain control of their digital assets through personal wallets, initiating transactions directly. OpenSea’s role, they assert, is primarily to facilitate discovery and connection between buyers and sellers, operating more as an interface than a traditional financial intermediary.
Given this decentralized structure, OpenSea argues that traditional regulatory requirements—such as capital maintenance, recordkeeping, and professional conduct standards—are ill-suited and unnecessary for NFT marketplaces.
OpenSea further argues against being classified as a broker under the Exchange Act. They maintain that they do not provide investment advice, negotiate or execute transactions, hold custody of user assets, or facilitate financing – activities typically associated with brokers. This echos arguments made by Coinbase, which you can read more about in our coverage of [SEC v. Coinbase decision]where the court found that merely providing wallet software and access to pricing data did not establish broker status.
OpenSea highlights that its operations are limited to displaying listings and showcasing trending NFTs, which they argue does not constitute investment advice or acting as an intermediary. This stance reflects a broader concern within the crypto industry about overregulation potentially stifling innovation.
To address the existing uncertainty, OpenSea is urging the SEC to provide clear guidance stating that NFT marketplaces are not subject to exchange or broker regulations. They suggest issuing an interpretive release or a staff bulletin to clarify how Rule 3b-16, which defines securities exchanges under federal law, applies to NFT marketplaces, drawing parallels to recent statements on memecoins and stablecoins. For more regulatory news, here’s an article about the [SEC’s crypto task force to host four roundtables on DeFi, tokenization and more].
“This clarification would offer immediate benefits to NFT collectors, buyers, and sellers, as well as the broader NFT ecosystem, by removing regulatory uncertainty,” the company stated.
The ambiguity surrounding the security status of NFTs intensified last year when OpenSea received a Wells notice from the SEC, signaling potential enforcement action. However, in February 2025, the agency closed its investigation without filing charges. This decision followed the return of President Donald Trump, who directed the SEC to ease crypto enforcement and prioritize regulatory clarity.