NFT marketplace OpenSea is seeking clarification from the U.S. Securities and Exchange Commission (SEC) about its regulatory status. The platform, which sees itself as a “digital bazaar,” wants regulators to distinguish between NFT marketplaces and more traditional securities exchanges or brokers. OpenSea argues that it should not be treated as a securities exchange or broker.
This request follows the SEC’s recent decision to drop its investigation into OpenSea, which had looked into potential violations of federal securities laws. In a letter to SEC Commissioner Hester Peirce, dated April 9, OpenSea’s legal team, led by General Counsel Adele Faure and Deputy General Counsel Laura Brookover, called for informal guidance that would exempt NFT marketplaces like OpenSea from the regulatory framework designed for securities exchanges and broker-dealers.
The company stressed that it does not meet the legal criteria of a securities exchange under U.S. law, as it does not conduct transactions or serve as an intermediary in the way traditional exchanges do. Instead, OpenSea defines itself as a platform that enables users to discover NFTs and connect with buyers and sellers, but without facilitating trades in the conventional sense.
In addition to distancing itself from the exchange label, OpenSea also rejects being categorized as a broker. The company argues that it does not provide investment advice, negotiate deals, or hold customer assets. OpenSea has requested that the SEC exclude NFT platforms from future regulations that would impose stricter oversight on brokers.
This move comes after the SEC decided in February to suspend several high-profile investigations into the cryptocurrency sector, including those involving OpenSea. The shift in the SEC’s stance aligns with broader policy changes under the Trump administration, which has shown increasing support for the crypto industry, though some critics remain skeptical of potential conflicts of interest.
While Bitcoin and the DeFi sector have experienced significant growth in recent years, the NFT market has faced a downturn. In 2024, trading volumes and sales figures for NFTs hit their lowest levels since 2020, with annual trading volumes down by 19% and sales dropping 18% compared to the previous year.