OpenSea has urged the United States Securities and Exchange Commission to formally clarify that NFT marketplaces do not qualify as exchanges or brokers according to US securities regulations.
In a letter directed to SEC Commissioner Hester Peirce, OpenSea stated, “We propose that the SEC make it clear that platforms like OpenSea do not meet the definition of exchanges under federal securities laws.”
The marketplace contends that NFT platforms do not align with the legal definitions of exchanges or brokers, as they do not facilitate transactions, act as intermediaries, or gather multiple sellers of the same asset.
Since most NFTs are unique digital items, there is generally only one seller per token. OpenSea argues that this lack of fungibility excludes these assets from the regulatory framework intended for fungible securities, where multiple sellers commonly exist.
Moreover, the letter highlights that all NFT transactions occur directly on the blockchain through smart contracts, independent of OpenSea’s involvement.
Users retain control of their own assets and initiate trades using their personal wallets. OpenSea primarily serves to help users discover NFTs and connect with potential buyers and sellers, acting more as an interface than as a financial intermediary.
Given this decentralized nature, OpenSea claims that conventional regulatory demands, such as capital preservation, recordkeeping duties, and standards of professional conduct, are inappropriate and incompatible with how NFT marketplaces operate.
OpenSea should not be deemed a broker
Furthermore, OpenSea asserts that it should not be categorized as a broker under the Exchange Act, emphasizing that it does not offer investment advice, negotiate or execute transactions, hold user assets in custody, or facilitate financing or documentation typically linked with broker operations.
Quoting legal precedents, the letter referenced the SEC v. Coinbase case, where the court determined that simply providing wallet software and access to pricing information did not grant broker status.
OpenSea argued that its functions are similarly constrained, stating that showcasing listings or promoting trending NFTs does not constitute providing investment advice or acting as an intermediary.
To clear ongoing uncertainty, OpenSea has called on the SEC to provide informal guidance, confirming that NFT marketplaces should not be subjected to exchange or broker regulations.
It suggested an interpretive release or a communication from the staff to clarify how Rule 3b-16, which defines securities exchanges under federal law, pertains to NFT marketplaces, akin to recent statements regarding memecoins and stablecoins.
“This clarification would provide immediate benefit to NFT collectors, buyers, and sellers, as well as the overall NFT ecosystem by alleviating regulatory uncertainty,” it stated.
The cloud of ambiguity surrounding the security status of NFTs intensified last year when OpenSea received a Wells notice from the SEC, signaling possible enforcement action.
However, in February 2025, the agency officially closed the investigation without pursuing charges after returning President Donald Trump called for the SEC to reduce its enforcement actions in the crypto sector and focus on providing regulatory clarity.