On April 26, OpenSea sent a letter to the U.S. Securities and Exchange Commission (SEC) requesting that NFT marketplaces be exempted from being classified as brokers and exchanges. Company executives noted that regulatory ambiguity may negatively impact innovation in the U.S. digital asset market.
Dispute over NFT Marketplace Classification
OpenSea formally asked the SEC not to classify NFT marketplaces as broker-dealers or securities exchanges. The platform’s legal counsel described such a move as regulatory overreach, arguing that NFT trading lacks the characteristics of traditional securities.
Letter Challenges SEC's Oversight of NFT Platforms
The letter stated that OpenSea does not execute trades, act as intermediaries, or manage pooled seller orders. Each NFT is unique, meaning only one seller exists for any given token at a time. Hence, marketplaces like OpenSea cannot meet the conditions set by the Securities Exchange Act of 1934.
Need for Regulatory Clarity in the Industry
The letter urged the SEC to issue informal guidance exempting NFT marketplaces from securities classification under the Exchange Act. It was argued that such logic should also apply to NFTs, which would immediately reduce uncertainty for platforms and users.
Open questions of regulation remain pertinent for all participants in the digital asset market, and OpenSea hopes for further clarification from the SEC.
