OpenSea Seeks SEC Clarity on NFT Marketplace Regulation

OpenSea, the leading NFT marketplace, has formally requested the US Securities and Exchange Commission (SEC) to clarify that NFT marketplaces should not be regulated as exchanges or brokers under federal securities laws. This request comes in the wake of the SEC dropping its investigation into OpenSea in February 2025. The letter, authored by OpenSea's General Counsel Adele Faure and Deputy General Counsel Laura Brookover, argues that NFT marketplaces do not fit the legal definition of an exchange under US securities laws. They state that platforms like OpenSea do not execute transactions, act as intermediaries, or bring together multiple sellers for the same asset.

OpenSea describes itself more as a “digital bazaar” than a trading floor, contending that it simply allows people to discover NFTs and connect with buyers and sellers rather than facilitating trades in the traditional sense. The company also pushed back against being classified as a broker, maintaining that OpenSea does not provide investment advice, negotiate deals, or custody customer assets – all activities typically associated with brokers. “NFT marketplaces do not hold or facilitate the flow of funds or assets and thus cannot commingle them, making capital requirements and financial recordkeeping irrelevant,” according to the letter.

This request for clarity aligns with the Trump administration’s more crypto-friendly approach. Since taking office in January 2025, President Trump has directed the SEC to clarify its position on cryptocurrency and established a “Crypto Task Force” to engage with industry players on drafting guidelines. This represents a clear departure from the approach under former SEC Chair Gary Gensler, who operated as if virtually all cryptocurrencies – except Bitcoin – fell under SEC jurisdiction and were subject to securities laws.

The SEC has already made some moves toward regulatory clarity. On April 4, the regulator published a notice stating that stablecoins meeting specific criteria are considered “non-securities” and exempt from transaction reporting requirements. Similarly, in February, the SEC’s division of corporation finance issued a statement indicating that memecoins are not securities under federal laws but are more similar to collectibles. OpenSea’s legal team is pushing for the Crypto Task Force to issue similar guidance regarding NFT marketplaces. “In preparing this guidance, the Crypto Task Force should specifically address the application of exchange regulations to marketplaces for non-fungible assets, similar to the recent staff statements on memecoins and stablecoins,” they wrote.

Despite Bitcoin’s record-breaking rally and growth in the DeFi sector, NFTs have struggled to maintain momentum. The market has faced serious headwinds over the past couple of years. In 2024, trading volumes and sales counts dropped to their weakest levels since 2020. Annual trading volumes fell by 19%, while sales were down by 18% compared to the previous year. This market downturn makes regulatory clarity even more important for companies like OpenSea that operate in the NFT space. A clear regulatory framework could help provide stability and encourage growth in a challenging market environment.

The SEC’s response to OpenSea’s request will be closely watched by other NFT marketplaces and the broader crypto industry. It could set an important precedent for how digital collectibles and their trading platforms are regulated in the United States. Commissioner Peirce’s Crypto Task Force has been meeting with various industry players, indicating ongoing dialogue between regulators and the crypto sector.