OpenSea seeks SEC clarity on NFT marketplace regulations

NFT marketplace OpenSea has formally requested the U.S. Securities and Exchange Commission (SEC) to clarify its regulatory stance on platforms like itself.

In a letter dated April 9, OpenSea’s general counsel, Adele Faure, and deputy general counsel, Laura Brookover, urged the SEC to confirm that NFT marketplaces should not be classified as securities exchanges or brokers.

The appeal follows the SEC’s decision in February to drop its investigation into OpenSea for alleged violations of federal securities laws.

The company argues that it does not meet the legal definition of an exchange or broker under U.S. securities laws because it neither executes transactions nor provides investment advice.

Instead, OpenSea describes itself as a “digital bazaar” that connects buyers and sellers of NFTs without acting as an intermediary.

“Classifying OpenSea and similar NFT marketplaces as securities exchanges or brokers would be regulatory overreach,” Faure and Brookover wrote.

They further requested the SEC to exempt NFT marketplaces from proposed broker regulations.

This move comes amid increased scrutiny of the crypto industry by U.S. regulators.

Last year, OpenSea received a Wells notice from the SEC, indicating potential enforcement action over claims that NFTs could be classified as unregistered securities.

While the investigation was later dropped, it highlighted ongoing regulatory uncertainty in the NFT space.

The broader NFT market has also faced challenges, with trading volumes and sales dropping significantly since their 2022 peak.

Despite this downturn, OpenSea continues to advocate for clearer rules to support innovation and protect creators from regulatory risks.

The SEC’s response to OpenSea’s request could have far-reaching implications for the NFT industry, determining whether platforms like OpenSea will face stricter oversight or remain categorised outside traditional securities frameworks.

For now, OpenSea maintains its stance that NFTs are creative goods rather than financial instruments and seeks regulatory clarity to ensure continued growth in the digital asset ecosystem.