OpenSea has formally asked the U.S. Securities and Exchange Commission to clarify that NFT marketplaces should not be regulated as securities exchanges or brokers. The firm communicated its stance via a letter addressed to the Crypto Task Force Chairman and Commissioner Hester Peirce.
OpenSea Argues NFTs Should Not Be Regulated
Via the submitted letter, the company argued that most non-fungible tokens are acquired for their artistic, aesthetic, or novelty value rather than for investment purposes and, therefore, do not qualify as securities.
OpenSea emphasized that its role is limited to serving as an online venue for NFT discovery and interaction without executing the actual transfer of assets, citing the eBay market platform. It further explained how NFTs are created and traded on blockchains like Ethereum, Solana, or Polygon through immutable smart contracts that manage the entire transaction process.
It noted that this decentralized mechanism contrasts with the traditional functions of a securities exchange, which requires an entity to bring together multiple buyers and sellers under an established set of rules. OpenSea asserts that regulatory requirements designed to protect investors from conflicts of interest and financial instability do not apply to a decentralized system where the underlying risks are inherently transparent and managed by the blockchain’s public protocols.
A Call to Action
The regulatory body had previously sent a Wells Notice to OpenSea, hence the need for the firm’s recent letter. The submission calls on the Commission to issue informal guidance, such as a staff bulletin or interpretive release, to resolve the regulatory uncertainty plaguing the NFT market.
OpenSea recommends that the SEC confirm that NFT marketplaces do not fall under the definitions of exchanges or brokers as outlined in the Exchange Act. It noted that such clarity would dismiss uncertainties and help U.S. tech companies remain at the forefront of digital innovation, including in the NFT sector.
Will the SEC Respond Favourably?
With the SEC Commissioner referred to as “Crypto Mom” for her blockchain-friendly stance, there is optimism in the industry that OpenSea’s appeal may receive a favorable hearing. Commissioner Peirce has been a vocal critic of regulatory overreach in the crypto industry and has consistently advocated for a more balanced approach.
The political climate surrounding NFTs adds to the potential for a receptive regulatory environment. President Donald Trump has repeatedly embraced NFTs as part of his brand strategy, even launching a fourth NFT collection last year.
