- OpenSea has asked the SEC to define the different types of NFT platforms
- OpenSea argues that there’s a difference between an NFT marketplace, broker, and exchange
- The NFT marketplace hopes the clarification will reflect on NFT regulations
NFT marketplace OpenSea urges the SEC to clarify the distinctions between various types of NFT platforms, such as NFT marketplaces, exchanges, and brokers. According to OpenSea, this classification will influence how the securities watchdog regulates collectibles, in order to prevent the application of exchange and broker rules to NFT marketplaces. OpenSea emphasized that the SEC would be exceeding its authority by categorizing marketplaces as “securities exchanges or brokers,” noting that marketplaces merely connect NFT collectors and do not necessarily prioritize trading, which creates a fine line between an exchange and a marketplace.
“NFTs Are Not Securities”
In a letter addressed to Hester Peirce, head of the SEC’s Crypto Task Force, OpenSea stated that “NFTs are not securities under the Exchange Act.” OpenSea argued that even if the SEC were to categorize NFTs as securities, it would be unjust to apply that definition to marketplaces.
We’re committed to advocating for clear, sensible regulations for NFTs and crypto, and proud to represent the community.
Read our letter to the SEC on our suggested approach:https://t.co/kzUKMLy80c pic.twitter.com/YxghK4ryne
— dfinzer.eth | opensea (@dfinzer) April 10, 2025
The NFT marketplace argued that the NFT process, from creation to trading, happens without a central authority, with platforms like OpenSea only connecting interested parties. In the letter, OpenSea said marketplaces don’t have “multiple sellers, but only one seller for each instrument,” putting them outside the Exchange Act’s definition of an exchange.
It further noted marketplaces aren’t exchanges because they don’t dictate the rules “that govern NFT transactions.” It said that the rules are set by NFT creators and embedded in an NFT project’s smart contracts.
Are They Also Not Brokers?
On why NFT marketplaces aren’t brokers, OpenSea said that marketplaces don’t offer investment advice, negotiate prices, custody user assets, or offer financing, which are the characteristics of a broker according to the Exchange Act.
OpenSea requested “the SEC [to] clearly state that NFT marketplaces […] do not qualify as exchanges.” It added that the commission should provide informal guidance on how the current regulations apply to NFT marketplaces as it prepares “to resolve this issue permanently.”
With the SEC issuing multiple NFT platforms, including OpenSea, with a Wells notice, it’s to be seen if it’ll review the rules to provide clarity between marketplaces, exchanges, and brokers.
