OpenSea asks SEC to rule that NFT marketplaces are not subject to its jurisdiction
Date: 2025-04-11 Author: Henry Casey Categories: BUSINESS
OpenSea’s legal team has reached out to Hester Peirce, a member of the U.S. Securities and Exchange Commission (SEC), known in the crypto community as “crypto mom,” asking for an informal clarification. The company is seeking confirmation that NFT marketplaces like its platform are not subject to SEC regulation like traditional exchanges or brokerages.
Adel Faure, OpenSea’s general counsel, along with Laura Brookover, its deputy, argued that classifying such platforms as stock exchanges or brokers is beyond the scope of the commission’s authority. According to them, OpenSea does not meet the legal definition of an exchange under U.S. securities laws because it does not conduct transactions or act as an intermediary between parties.
OpenSea insists that its platform functions as a digital storefront where users can find NFTs and interact with each other. The company does not facilitate trading in the traditional sense of an exchange, and does not undertake any obligations to facilitate trades.
OpenSea also rejected the possibility of being classified as a broker. The company noted that it does not provide investment advice, does not negotiate deals, and does not store user assets, which, in its opinion, completely excludes such an interpretation of its activities.
This move comes after the SEC closed an investigation into OpenSea in February of this year. The investigation concerned possible violations of securities laws, but was terminated after a change in leadership at the commission.
Amid the general rise of the cryptocurrency sector and the development of decentralized finance (DeFi), the NFT market is experiencing a decline. In 2024, NFT trading volume and transactions fell by 19% and 18%, respectively, reaching their lowest levels since 2020.
