Leading NFT platform OpenSea is urging the U.S. Securities and Exchange Commission (SEC) to formally recognize that marketplaces for non-fungible tokens do not operate as securities exchanges or brokerages under current federal laws.
In a direct appeal to SEC Commissioner Hester Peirce, OpenSea presented its case, stating, “We propose that the SEC clearly state that NFT marketplaces like OpenSea do not qualify as exchanges under federal securities laws.”[Link to OpenSea’s letter to SEC]
The platform contends that its operations fundamentally differ from traditional exchanges. OpenSea argues it doesn’t fit the legal definition because it avoids handling transaction settlements, doesn’t function as an intermediary matching orders, and typically doesn’t list multiple sellers for identical assets.
The core argument hinges on the nature of NFTs themselves. As most are unique digital items, there’s usually only one seller per token. OpenSea believes this inherent non-fungibility makes the regulatory framework for fungible securities, which often have numerous sellers, inapplicable.
Furthermore, the letter highlighted that all NFT transactions are executed directly on the blockchain through smart contracts, operating independently of the OpenSea platform itself.
[Link to article: OpenSea and YOAKE brings ‘The Seven Deadly Sins’ anime NFTs to Soneium]
Users retain control over their digital assets and initiate all trades using their personal crypto wallets. OpenSea describes its function as merely enabling users “to discover NFTs and connect with buyers and sellers,” positioning itself as an interface rather than a financial go-between.
Based on this decentralized model, OpenSea argues that conventional regulatory burdens like capital requirements, extensive recordkeeping, and specific professional conduct standards are inappropriate and ill-suited for NFT marketplace operations.
OpenSea Argues Against Broker Classification
OpenSea also firmly stated it shouldn’t be categorized as a broker under the Exchange Act. It reiterated that the platform refrains from offering investment advice, negotiating or executing trades on behalf of users, holding customer assets, or facilitating financing arrangements typical of brokerage activities.
The company pointed to legal precedent, specifically the SEC v. Coinbase ruling, where a court determined that providing wallet software and access to price information wasn’t sufficient to classify a company as a broker.[Link to article: SEC v. Coinbase decision details]
OpenSea asserted its activities are similarly restricted, suggesting that displaying NFT listings or highlighting popular collections doesn’t constitute investment advice or intermediary actions.
Seeking to resolve persistent regulatory ambiguity, OpenSea requested the SEC provide informal guidance confirming that NFT marketplaces fall outside exchange and broker regulations.
It suggested an interpretive release or a staff bulletin to clarify the application of Rule 3b-16 (defining a securities exchange) to the NFT sector, similar to how the agency has addressed topics like memecoins and stablecoins recently.
“This clarification would offer immediate benefits to NFT collectors, buyers, and sellers, as well as the broader NFT ecosystem, by removing regulatory uncertainty,” the letter concluded.
The debate over the regulatory status of NFTs gained significant attention last year when OpenSea reportedly received a Wells notice from the SEC, signaling a potential enforcement action.[Link to article: Details on OpenSea’s Wells notice from the SEC]
However, the situation shifted in February 2025 when the agency officially closed its investigation into OpenSea without bringing charges. This decision followed a directive from returning President Donald Trump instructing the SEC to moderate its crypto enforcement approach and focus on establishing clearer regulations.[Link to article: SEC closes OpenSea investigation][Link to article: Details on Trump’s directive for crypto clarity][Link to article: OpenSea investigation ends, Bybit hack, Ye | Weekly Recap]