Crypto Market News: OpenSea Demands SEC Stop Calling NFT Marketplaces ‘Exchanges’

NFT platform OpenSea has asked the U.S. Securities and Exchange Commission (SEC) to officially confirm that marketplaces like its own are not “exchanges” or “brokers” under current securities laws. This request was made in a direct letter to SEC Commissioner Hester Peirce.

OpenSea said that the structure and purpose of NFT marketplaces are fundamentally different from traditional trading platforms. It stated, 

“NFT platforms operate as discovery tools, not trading engines designed to match buyers and sellers of identical assets.” 

The company argued that NFT marketplaces do not meet the technical requirements to be considered securities exchanges, as they do not manage transactions or hold custody of user funds.

NFT Trading Functions Through Smart Contracts

The letter pointed out that NFTs, by nature, are one-of-a-kind digital items that typically involve only one seller per asset. OpenSea said this makes it impossible to group them under securities frameworks designed for interchangeable and mass-traded assets.

It emphasized that all NFT transfers happen directly between users via blockchain smart contracts, not through the OpenSea platform. According to the company, 

“Our platform does not carry out transactions—it only provides the tools for users to connect and trade on their own terms.” 

This method, OpenSea explained, keeps the platform outside the scope of securities exchange functions.

Disputing the ‘Broker’ Label

In addition to challenging the “exchange” label, OpenSea also contested any classification as a broker. The company said it does not offer investment suggestions, complete trades, or handle digital assets on behalf of its users. Instead, it provides a user interface that allows individuals to browse and list NFTs.

Referencing past legal examples, OpenSea compared its operations to those of wallet and data providers. “Promoting listings or showing what’s trending isn’t the same as offering advice or arranging deals,” the company wrote. It stressed that users always manage their own wallets, meaning OpenSea never acts as an intermediary or financial service provider.

Request for Formal SEC Guidance

To help eliminate confusion, OpenSea asked the SEC to publish an informal guidance document that would clarify how securities laws apply to NFT marketplaces. The company proposed that the SEC issue a staff bulletin or interpretive release outlining how Rule 3b-16—used to define securities exchanges—relates to NFT platforms.

OpenSea stated, “Clear communication from the Commission would allow platforms and creators to focus on innovation without the risk of sudden enforcement.” It said this clarification would support a healthier market environment and allow users to interact with NFTs confidently.

The issue follows a 2024 Wells notice sent to OpenSea, which warned of possible enforcement action. That notice was later withdrawn in February 2025, after the SEC ended its investigation in response to federal directives to ease pressure on the crypto industry.

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