TLDR
OpenSea has requested the SEC to make clear that NFT marketplaces are usually not topic to regulation as exchanges or brokers
The request follows SEC dropping its investigation into OpenSea in February 2025
OpenSea argues it doesn’t meet the authorized definition of an change because it doesn’t execute transactions
NFT markets have been struggling, with 2024 buying and selling volumes down 19% from earlier 12 months
This request comes amid a broader coverage shift below the Trump administration towards a extra crypto-friendly strategy
OpenSea, the main NFT market, has formally requested the US Securities and Change Fee (SEC) to explicitly state that NFT marketplaces shouldn’t be regulated as exchanges or brokers below federal securities legal guidelines. In a letter dated April 9 addressed to Commissioner Hester Peirce, who heads the SEC’s Crypto Activity Drive, OpenSea’s authorized workforce outlined their case for regulatory exemption.
The letter, authored by Common Counsel Adele Faure and Deputy Common Counsel Laura Brookover, argues that NFT marketplaces don’t match the authorized definition of an change below US securities legal guidelines. They state that platforms like OpenSea don’t execute transactions, act as intermediaries, or deliver collectively a number of sellers for a similar asset.
“The Fee’s previous enforcement agenda has created uncertainty. We due to this fact urge the Fee to take away this uncertainty and shield the power of US know-how firms to guide on this area,” wrote Faure and Brookover of their attraction.
Redefining Digital Marketplaces
OpenSea describes itself extra as a “digital bazaar” than a buying and selling ground. The platform contends it merely permits folks to find NFTs and join with patrons and sellers moderately than facilitating trades within the conventional sense.
The corporate additionally pushed again in opposition to being categorised as a dealer. They preserve that OpenSea doesn’t present funding recommendation, negotiate offers, or custody buyer belongings – all actions usually related to brokers.
“NFT marketplaces don’t maintain or facilitate the circulation of funds or belongings and thus can not commingle them, making capital necessities and monetary recordkeeping irrelevant,” based on the letter.
This request for readability comes simply months after the SEC dropped its investigation into OpenSea. In February 2025, the regulatory physique shelved a number of high-profile investigations into crypto firms as a part of a broader coverage shift.
Regulatory Panorama Adjustments
The altering regulatory stance aligns with the Trump administration’s extra crypto-friendly strategy. Since taking workplace in January 2025, President Trump has directed the SEC to make clear its place on cryptocurrency and established a “Crypto Activity Drive” to interact with trade gamers on drafting tips.
This represents a transparent departure from the strategy below former SEC Chair Gary Gensler, who operated as if nearly all cryptocurrencies – besides Bitcoin – fell below SEC jurisdiction and have been topic to securities legal guidelines.
The SEC has already made some strikes towards regulatory readability. On April 4, the regulator revealed a discover stating that stablecoins assembly particular standards are thought-about “non-securities” and exempt from transaction reporting necessities.
Equally, in February, the SEC’s division of company finance issued a press release indicating that memecoins are usually not securities below federal legal guidelines however are extra just like collectibles.
OpenSea’s authorized workforce is pushing for the Crypto Activity Drive to concern related steering relating to NFT marketplaces. “In getting ready this steering, the Crypto Activity Drive ought to particularly handle the appliance of change rules to marketplaces for non-fungible belongings, just like the latest workers statements on memecoins and stablecoins,” they wrote.
NFT Market Challenges
Regardless of Bitcoin’s record-breaking rally and development within the DeFi sector, NFTs have struggled to take care of momentum. The market has confronted severe headwinds over the previous couple of years.
In 2024, buying and selling volumes and gross sales counts dropped to their weakest ranges since 2020. Annual buying and selling volumes fell by 19%, whereas gross sales have been down by 18% in comparison with the earlier 12 months.
This market downturn makes regulatory readability much more vital for firms like OpenSea that function within the NFT area. A transparent regulatory framework may assist present stability and encourage development in a difficult market setting.
The SEC’s response to OpenSea’s request shall be carefully watched by different NFT marketplaces and the broader crypto trade. It may set an vital precedent for the way digital collectibles and their buying and selling platforms are regulated in the US.
Commissioner Peirce’s Crypto Activity Drive has been assembly with numerous trade gamers, together with Jito Labs, which lately really helpful that the SEC approve staking ETFs, indicating ongoing dialogue between regulators and the crypto sector.
