OpenSea Urges SEC to Exempt NFT Marketplaces from Broker Regulations

OpenSea, a prominent non-fungible token (NFT) marketplace, has formally requested the United States Securities and Exchange Commission (SEC) to exempt NFT marketplaces from being classified as securities exchanges or brokers under federal law. In a letter addressed to SEC Commissioner Hester Peirce, the New York-based firm emphasized the need for clear regulatory guidelines that distinguish NFT marketplaces from traditional securities exchanges.

The company argued that NFT marketplaces do not meet the legal criteria for being classified as securities exchanges or brokers. OpenSea contended that since each NFT is unique and typically has only one owner and one seller at a time, they are fundamentally different from traditional securities. The firm also highlighted that NFT marketplaces do not operate as trading facilities or set rules for transaction execution, as all transactions are executed directly on the blockchain via smart contracts.

OpenSea described its platform as a tool that allows users to discover NFTs, rather than a platform that processes or finalizes trades. The company further argued that merely displaying NFT listings or highlighting popular collections does not constitute solicitation or investment advice, and thus, assigning a broker designation to platforms like OpenSea is unnecessary. OpenSea referenced the SEC’s case against Coinbase, where the court ruled that providing wallet tools and pricing data did not constitute broker activity, supporting its own position.

To address the ongoing regulatory uncertainty, OpenSea has urged the SEC to issue informal guidance clarifying that NFT marketplaces are not subject to broker or exchange regulations. The company believes that such guidance would benefit NFT collectors, buyers, and sellers, as well as the broader NFT ecosystem, by providing clarity and reducing the fear of enforcement actions based on misapplied rules. In the long term, OpenSea has invited the Commission to exempt NFT marketplaces from proposed broker regulations under Section 15(a) of the Exchange Act and offered to collaborate directly with the agency to shape practical policy.

The tension between OpenSea and the SEC has been escalating since last year when the agency issued a Wells notice to the company. This formal warning suggested that OpenSea may have violated federal securities laws by operating as an unregistered exchange or broker through its NFT marketplace. The move sparked criticism across the crypto industry, with many arguing that the SEC was overreaching and relying on a strategy of “regulation by enforcement” rather than providing clear rules. The attempt to classify NFTs as securities and marketplaces like OpenSea as subject to securities law was viewed by many as a fundamental misunderstanding of how non-fungible tokens function. In February 2025, the SEC formally closed the investigation without filing any charges, a decision made under the Trump administration, which has taken a more hands-off approach to crypto and instructed agencies to focus on clarity over enforcement.