NFT marketplace OpenSea is asking U.S. regulators to clarify that it and platforms like it should not be treated as securities exchanges or brokers. 

The request comes just months after the Securities and Exchange Commission (SEC) dropped a probe into the company’s alleged violation of federal securities laws.

In a letter dated April 9, OpenSea’s general counsel, Adele Faure, and deputy general counsel Laura Brookover urged SEC Commissioner Hester Peirce to issue informal guidance affirming that NFT marketplaces fall outside the scope of broker-dealer and exchange rules.

“Classifying OpenSea and similar NFT marketplaces as securities exchanges or brokers would be regulatory overreach,” they wrote.

The company contends it doesn’t meet the legal definition of an exchange under U.S. securities laws because it doesn’t execute transactions or act as an intermediary. 

OpenSea describes itself more as a digital bazaar than a trading floor, “allowing people to discover NFTs and connect with buyers and sellers” rather than facilitating trades in the traditional sense.

It also pushed back on the broker label, saying it doesn’t provide investment advice, negotiate deals, or custody customer assets. In the longer term, it has asked the Commission to exempt NFT marketplaces like OpenSea from proposed broker regulation.

The letter follows the SEC’s decision in February to shelve several high-profile investigations into crypto companies, including one into OpenSea. 

Those decisions came amid a broader policy pivot under Donald Trump that has embraced the crypto industry, though skeptics question whether the president is simply trying to enrich himself.

Despite Bitcoin’s record-breaking rally and the DeFi sector’s growth, NFTs have remained in the doldrums over the past couple of years. 

In 2024, trading volumes and sales counts dropped to their weakest levels since 2020. Annual trading volumes fell by 19%, while sales were down by 18% compared to the year before.

Edited by Sebastian Sinclair