- OpenSea claims NFT marketplaces cannot qualify as brokers under SEC definitions.
- The letter states that NFT trades happen directly via user wallets and smart contracts.
- OpenSea urges the SEC to issue guidance exempting NFTs from securities laws.
OpenSea has asked the U.S. Securities and Exchange Commission (SEC) to make a statement that platforms offering NFTs are exempt from federal exchange or broker regulation. Executives, in a letter dated April 9, stated that present ambiguity risks harming innovation and leadership in the U.S. digital asset marketplace.
NFT Marketplaces Dispute Broker and Exchange Classification
CoinRank reported that OpenSea formally asked the SEC not to classify NFT marketplaces as broker-dealers or securities exchanges. The platform’s legal counsel described such a move as regulatory overreach and argued that NFT trading lacks the characteristics of traditional securities. The letter was signed by OpenSea General Counsel Adele Faure and Deputy General Counsel Laura Brookover.
The executives stated that NFT platforms do not execute trades, act as intermediaries, or manage pooled seller orders. Each NFT is unique, meaning only one seller exists for any given token at a time. Hence, marketplaces like OpenSea cannot meet the conditions set by the Securities Exchange Act of 1934.
Letter Challenges SEC’s Oversight of NFT Platforms
The letter explained that OpenSea does not qualify as an exchange or broker under current legal definitions. The platform does not custody assets, arrange trades, or offer investment guidance to users. It simply presents blockchain-verified listings and enables users to connect through on-chain smart contracts.
Faure and Brookover emphasized that NFT trades occur directly between users via self-custodied wallets and smart contracts. These transactions are governed by transparent blockchain protocols and executed without a central authority. Additionally, OpenSea does not process payments or perform asset valuations, two core functions in broker activity.
Regulatory Clarity Remains a Central Industry Concern
The letter urged the SEC to issue informal guidance exempting NFT marketplaces from securities classification under the Exchange Act. It pointed to recent Commission comments declaring memecoins and stablecoins as non-securities, calling for the same logic to apply to NFTs. This approach, they argued, would immediately reduce uncertainty for platforms and users.
Under the current administration, the SEC has rolled back several high-profile enforcement actions, including one targeting OpenSea. The legal team asked the agency to finalize its evolving stance through a clear regulatory interpretation.
