OpenSea Challenges SEC’s View On NFT Platforms As Exchanges Or Brokers
OpenSea is urging U.S. regulators to formally confirm that NFT marketplaces should not fall under federal securities laws as either exchanges or brokers.
The platform made its case in a detailed letter to SEC Commissioner Hester Peirce, who leads the agency’s Crypto Task Force.
A Push Against Regulatory Overreach
OpenSea’s general counsel Adele Faure and deputy general counsel Laura Brookover stated that classifying NFT marketplaces under traditional financial regulations would be a stretch.
They wrote in the 9 April 2025 letter,
“Classifying OpenSea and similar NFT marketplaces as securities exchanges or brokers would be regulatory overreach,”
Source: SEC
Their central argument hinges on the legal definitions under U.S. securities law.
Request For Informal Guidance
OpenSea is calling on the SEC to issue informal guidance to clarify the agency’s stance.
In the letter, Faure and Brookover wrote,
“We ask the SEC to clear the existing industry confusion on this issue by publishing informal guidance. In the longer term, we invite the Commission to exempt NFT marketplaces like OpenSea from proposed broker regulation.”
They urged the Crypto Task Force to specifically address how exchange regulations apply to platforms that deal in non-fungible assets — just as the SEC recently did with stablecoins and memecoins.
In recent months, the SEC announced that certain stablecoins are exempt from transaction reporting, while memecoins are considered more akin to collectibles, not securities.
No Role As Broker Or Exchange, Says Company
The letter highlights OpenSea’s stance that it should not be treated as a broker either, noting that it doesn’t provide investment advice, facilitate deals, or manage user funds.
The legal team argued,
“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.”
They went on to say that OpenSea shouldn’t be regulated like a trading venue such as the New York Stock Exchange.
They explained their reasoning by stating that transactions on OpenSea are executed through unchangeable smart contracts, and the platform does not fulfill the legal prerequisite of having "multiple sellers" as defined by the Exchange Act.
Rather, it functions more like a digital marketplace where users connect, discover, and sell NFTs without the platform controlling the transaction process.
Regulatory Climate Shift Under Trump Administration
This push comes just months after the SEC dropped its investigation into OpenSea over potential securities violations.
The move followed a broader shift in the agency’s approach to crypto enforcement since President Donald Trump returned to office.
Under the current administration, the SEC has dismissed several high-profile investigations into crypto firms and taken a less aggressive regulatory stance.
This includes OpenSea.
As one of his first official actions, Trump ordered the formation of a Crypto Task Force to work more closely with the industry and clarify regulatory expectations.
Industry Uncertainty Still Lingers
Faure and Brookover criticised the SEC’s previous enforcement-heavy approach.
They argued that it had created confusion, stating,
“The Division of Enforcement’s previous move to extend exchange and broker regulations to OpenSea appeared to be focused more on expanding the Commission’s jurisdiction than on addressing the particular risk profiles of NFT marketplaces.”
They urged the SEC to “let the actual issues guide the regulatory solutions” and to ensure U.S. technology firms remain competitive in the growing digital assets sector.
NFT Market Faces Slump Despite Broader Crypto Growth
While Bitcoin and DeFi markets have surged, the NFT sector has not followed the same trajectory.
In 2024, NFT trading volumes and sales dropped significantly — with volumes down 19% and total sales falling by 18%, marking the weakest performance since 2020.
OpenSea, once the dominant force in NFTs, continues to advocate for regulatory clarity as the market recalibrates.
The outcome of its appeal to the SEC could influence how NFT platforms operate in the U.S. moving forward.
Anais
