The company Ozone Networks, which operates the OpenSea platform, has reached out to the U.S. Securities and Exchange Commission (SEC) requesting clarification on the status of NFT marketplaces. This comes amid attempts by the SEC to expand its jurisdiction over NFTs, particularly as the OpenSea marketplace has come under the regulator’s scrutiny. Following the departure of former SEC Chair Gary Gensler, the investigation into OpenSea was halted.
This is reported by Finway
Request for Clarification on NFT Status
In a letter to the Chair of the SEC’s Crypto Assets Working Group, Hester Peirce, representatives of OpenSea emphasized the need to clarify whether NFT marketplaces are considered exchanges or brokers. They argue that even if some NFT transactions could be viewed as investment contracts, defining marketplaces as exchanges and brokers is an example of overregulation.
OpenSea’s Arguments Regarding Marketplace Status
In their letter, the company noted that:
- The marketplace does not aggregate numerous sellers of a single product, as each token has only one seller—the current owner;
- OpenSea does not control or execute NFT transactions, which are recorded on the blockchain through smart contracts;
- The platform does not provide investment advice, does not promote NFTs, does not exercise custody over assets, and does not control users’ tokens.
The OpenSea team also recommended that the SEC issue a relevant bulletin or guidance regarding the status of NFTs and marketplaces, as well as exempt them from future regulations. This would contribute to a clearer understanding of the role of NFTs in the economy and prevent misunderstandings between the regulator and platforms.
“NFTs are collectibles and art; they do not fall under the category of securities,” stated project leader Devin Finzer.