OpenSea, Urging SEC for NFT platform regulation easing
OpenSea requesting clear regulations on NFT from SEC (Source: OpenSea)
NFT trading platform OpenSea has officially requested the United States Securities and Exchange Commission (SEC) not to consider NFT marketplaces as traditional stock exchanges or brokers. This is in view of the SEC recently clarifying the security status of certain digital assets, conveying the industry's position that NFTs should be deemed an exception.
On the 10th (local time), OpenSea emphasized in a letter to SEC Commissioner Hester Peirce that NFT trading is not the repetitive trading of identical assets, nor is it a structure that mediates orders between multiple sellers and buyers. The company explained that “NFTs are digital collectibles with uniqueness and do not align with the traditional definition of securities.”
OpenSea specifically claimed that NFT platforms do not control user funds or provide investment advice or directly handle transactions, and hence do not fall under the broker category. Additionally, mentioning that NFT marketplaces are closer to digital stores than existing financial intermediaries, they stated, “It is inappropriate to apply securities exchange rules directly to digital asset platforms.”
The company also requested the SEC's cryptocurrency task force to provide informal guidelines on the legal categorization of NFTs. This implies that the same type of interpretation is needed for NFTs as when the SEC recently judged that some stablecoins and meme coins are 'not securities'.
This request came immediately after the SEC decided not to classify NFTs as securities following their investigation into OpenSea. This is interpreted as a signal that the regulatory approach to NFTs may be eased in the future.
Meanwhile, the NFT market has been showing a decline in both trading volume and sales after rapid growth in 2020. OpenSea argues that despite this situation, NFTs have unique characteristics that distinguish them from other cryptocurrency assets, necessitating a clear legal definition and regulatory easing.