OpenSea Defends NFTs as Non-Securities, Pushes Back Against SEC Exchange Classification

OpenSea files a detailed letter to the SEC, arguing NFTs aren’t securities and seeking clarity on regulations to protect NFT marketplaces from misclassification.

OpenSea Argues NFTs Aren’t Securities In Letter To SEC

In a pivotal regulatory move, OpenSea — the leading marketplace for non-fungible tokens (NFTs) — has formally addressed the U.S. Securities and Exchange Commission (SEC), arguing that NFTs do not fall under the traditional definition of securities and should not be regulated as such.

The letter, addressed to Crypto Task Force Chair Commissioner Hester M. Peirce and dated April 9, 2025, seeks both clarification and exemption following a Wells Notice issued by the SEC in 2024. That notice alleged OpenSea had been operating as an unregistered securities broker and exchange. OpenSea’s correspondence outlines why it believes that NFT marketplaces should not be subject to regulations under the Securities Exchange Act of 1934.

NFTs, Exchanges, and the Blockchain Dynamic

OpenSea explained in detail how its platform operates to challenge its classification as a securities exchange. According to the company, NFTs are created through blockchain-enabled smart contracts — primarily on Ethereum, Solana, and Polygon — which generate unique token IDs with embedded metadata.

Once minted, NFT transfers are executed directly on-chain by users, without any centralized interference from OpenSea. “This decentralized transfer happens without a central intermediary, such as OpenSea, performing the transaction,” the letter states.

OpenSea further asserted that it does not meet the Exchange Act’s definition of an exchange. Because each NFT is one-of-a-kind, there is no pooling of identical assets, and thus no order-matching mechanism. Additionally, OpenSea claims it does not dictate trade terms or operate as a trading facility; instead, it provides a user interface to interact with blockchain protocols.

Not a Broker, Either

The SEC’s definition of a broker includes any entity engaged in facilitating securities transactions on behalf of others. OpenSea emphasized that its operations resemble more of a content-sharing platform than a broker-dealer service.

Drawing parallels to the Coinbase wallet decision, OpenSea noted it does not solicit trades, offer investment advice, negotiate or execute trades, or hold custody of user assets. “We don’t handle funds, offer valuations, or facilitate financing,” the company wrote.

Most critically, the company argued that NFTs — by nature — are not securities. The letter emphasized that NFTs are primarily collectibles, artwork, or cultural items intended for novelty or personal interest, not as investment vehicles.

A Plea for Regulatory Clarity

While defending itself, OpenSea’s letter also pushed for broader regulatory clarity. The company suggested that the SEC issue informal guidance — such as an interpretive release or staff bulletin — to clarify how Rule 3b-16 applies to NFTs.

OpenSea recommends that NFT marketplaces with specific characteristics, including a lack of financial intermediation, investment advisory services, or custody, be explicitly excluded from broker or exchange definitions.

OpenSea warned that without such clarification, the SEC’s approach could stifle innovation and unnecessarily drag NFT platforms into regulatory frameworks not designed for non-fungible digital assets. The letter ultimately positioned NFTs as deserving of their own regulatory category — one that recognizes the fundamental differences between them and traditional securities.

Looking Ahead

As the NFT sector grows and intersects with entertainment, gaming, and global commerce, OpenSea’s challenge to the SEC could define how digital ownership is regulated in the U.S. moving forward. The ball is now in the Commission’s court, and the crypto industry watches closely.

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