OpenSea Urges SEC to Exempt NFT Marketplaces from Securities Laws

OpenSea, a prominent NFT marketplace, has formally addressed the US Securities and Exchange Commission (SEC) regarding the regulatory classification of NFT platforms. In a letter dated April 9, 2025, OpenSea's general counsel Adele Faure and deputy general counsel Laura Brookover argued that NFT marketplaces like OpenSea should not be categorized as securities exchanges or brokers under the Securities Exchange Act of 1934. They proposed two key steps for the SEC to confirm this non-regulated status, aiming to provide clarity and support the growth of the NFT ecosystem.

The letter highlighted that the SEC's previous attempts to extend exchange and broker regulations to OpenSea seemed more focused on expanding regulatory jurisdiction rather than addressing potential risks. OpenSea urged the SEC to reject this approach and instead provide clarity and regulatory solutions based on actual issues. The company emphasized the need to remove regulatory uncertainty to protect the leadership of US technology companies in the NFT space.

OpenSea proposed two specific actions for the SEC. First, the SEC should clearly state that NFT marketplaces like OpenSea do not qualify as exchanges under federal securities laws. Additionally, the SEC should issue informal guidance in the near term to clarify the application of exchange regulations to NFT marketplaces. This guidance would offer immediate benefits to NFT collectors, buyers, and sellers, as well as the broader NFT ecosystem, by removing regulatory uncertainty.

Second, OpenSea suggested that the SEC clarify that marketplaces are not brokers under the Exchange Act based on two characteristics. First, marketplaces aggregate and present information about NFTs without providing valuations, solicitations, or investment advice. Second, marketplaces facilitate offers to buy and sell NFTs between users but do not execute transactions or control users' digital assets. Therefore, marketplaces like OpenSea function as exploration tools rather than brokers.

OpenSea also requested that the SEC publish informal guidance in the near term to clear existing industry confusion and exempt NFT marketplaces like OpenSea from proposed broker regulation in the long term. This move follows the SEC's closure of its investigation into OpenSea in February 2025, which began in August 2024 with a Wells notice alleging the platform functioned as an unregistered securities marketplace. OpenSea founder Devin Finzer welcomed the closure, stating that classifying NFTs as securities could have significantly obstructed innovation within the sector.