The largest NFT marketplace, OpenSea, has appealed to the U.S. Securities and Exchange Commission (SEC) requesting that securities laws not be applied to NFT platforms. In a letter dated April 9 and addressed to SEC Commissioner and head of the agency’s crypto group Hester Peirce, OpenSea’s legal team called on the regulator to explicitly state that such platforms do not fall under the definition of an “exchange.”
OpenSea Demands Clarity
OpenSea’s Chief Legal Officer Adele Faure and her deputy Laura Brookover argue that NFT marketplaces do not meet the legal definition of an exchange under U.S. securities law. According to them, these platforms do not execute trades, do not act as intermediaries, and do not simultaneously aggregate multiple sellers of the same asset.
The letter notes that previous SEC enforcement actions involving cryptocurrencies have created legal uncertainty. OpenSea representatives urge the commission to eliminate ambiguous areas so that American tech companies can confidently develop in the sector.
In addition to excluding NFT platforms from the “exchange” category, OpenSea’s lawyers also call on the SEC not to treat these services as brokers. They assert that OpenSea and similar platforms do not provide investment advice, do not custody user assets, and do not execute transactions on behalf of clients.
Faure and Brookover suggested that the commission issue informal guidance clarifying the applicability of securities laws to NFTs. They also urged that NFT marketplaces be fully exempt from broker-dealer registration requirements in the long term.
SEC’s Shift Toward Leniency
The letter also emphasizes the need to treat NFT markets as a separate issue, similar to the SEC’s recent clarifications on stablecoins and meme tokens. On April 4, the regulator published a statement indicating that certain stablecoins are not considered securities and are not subject to mandatory transaction reporting.
Amid changes within the SEC following Gary Gensler’s departure and Paul Atkins’ appointment, the commission is gradually shifting away from its previous hardline stance on the crypto industry. Several investigations into crypto companies, including the case against OpenSea itself, have recently been dropped.
This post is for informational purposes only and is not an ad or investment advice. Please do your own research making any decisions.