OpenSea to SEC: NFT Marketplaces Are Not Securities Exchanges

In Brief:

OpenSea urged the SEC to clarify that NFT platforms shouldn't be classified as securities exchanges or brokers.

The request follows the SEC’s decision in February to end its investigation into OpenSea.

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OpenSea has formally asked the U.S. Securities and Exchange Commission (SEC) to confirm that NFT marketplaces like itself should not be regulated as securities exchanges or brokers.

In a letter sent on April 9, OpenSea’s legal team described the platform as a “digital bazaar,” not an intermediary for executing transactions. The company emphasized that it does not match trades, offer investment advice, or hold customer assets—key characteristics that typically define regulated exchanges or brokerage firms.

The move comes after the SEC terminated its investigation into OpenSea’s compliance with securities laws in February 2024. While that decision marked a win for the platform, OpenSea’s counsel now seeks clearer guidance as regulatory uncertainty looms over the NFT space.

OpenSea’s request also highlights broader industry concerns. Despite the explosive growth of NFTs in 2021 and 2022, the market has since cooled off. Trading volume and sales have both declined by over 18% in 2024, according to industry data, hitting their lowest levels since 2020.

As interest shifts away from speculative digital collectibles, OpenSea argues that classifying NFT platforms under securities laws would be a misstep—potentially stifling innovation without enhancing consumer protection.

With U.S. regulators still defining how to approach digital assets, OpenSea’s proactive stance signals the industry’s growing desire for tailored, modernized regulation.

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