In the cryptocurrency circle (120btc.cOM): The leading US NFT platform OpenSea has officially called on regulators, asking the US Securities and Exchange Commission ( SEC) to clarify that the NFT market should not be included in the definitions of "exchange" or "broker" under federal securities law.
This letter was submitted on Wednesday to SEC Commissioner Hester Peirce, who is also the chair of the "Cryptocurrency Working Group," co-signed by OpenSea's General Counsel Adele Faure and Deputy General Counsel Laura Brookover. It emphasizes that the NFT market operates on a completely different logic than the traditional financial system, and therefore should not be subject to the relevant provisions of federal securities law.
Regulatory Winds Shift, OpenSea Seizes the Opportunity
The SEC abandoned its investigation into OpenSea in February this year, due to the U.S. government's friendlier regulatory stance on cryptocurrency. As one of the first policy actions by President Trump ( Donald Trump, he instructed the SEC to clarify the agency's position on cryptocurrency and established a "cryptocurrency task force" to draft regulatory guidelines in collaboration with the industry.
For many years, the SEC has been criticized for its "regulation by enforcement" policy, and it has been recognized that the SEC is unable to articulate workable rules. Under the leadership of former Chairman Gary Gensler, the SEC's approach has been to classify all cryptocurrencies except Bitcoin as falling under its jurisdiction and subject to securities laws.
Require Regulation to Return to Its Essence and Eliminate Uncertainty
Adele Faure, the Chief Legal Officer of OpenSea, and Laura Brookover, the Deputy Chief Legal Officer, stated in a letter on Wednesday: "Law enforcement has previously expanded the regulatory scope of exchanges and brokers to include OpenSea, clearly focusing on broadening the committee's authority rather than addressing the specific risk conditions of the NFT market."
The OpenSea Advisory Committee rejects this practice and instead allows actual issues to guide regulatory solutions. Additionally, the committee's past enforcement policies have created uncertainty. Therefore, we urge the committee to eliminate this uncertainty and protect the leading position of American technology companies in this field.
Adele Faure and Laura Brookover argue that for exchanges like OpenSea, the title of "broker" is "unnecessary" because there are no underlying risks such as "conflicts of interest, financial instability, and misconduct" in the cryptocurrency ecosystem: the NFT market does not hold or facilitate the flow of funds or assets, thus cannot mix them, making capital requirements and financial records irrelevant. Additionally, OpenSea does not recommend making investments or executing trades on behalf of users.
Similarly, OpenSea should not be considered a "trading venue" for regulation like the New York Stock Exchange )NYSE(, because the transactions on the platform are executed automatically through immutable smart contracts, and the platform does not meet the "multiple sellers" requirement of the Securities Exchange Act.
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OpenSea asks the U.S. SEC to clarify: the NFT market is not an exchange or broker.
In the cryptocurrency circle (120btc.cOM): The leading US NFT platform OpenSea has officially called on regulators, asking the US Securities and Exchange Commission ( SEC) to clarify that the NFT market should not be included in the definitions of "exchange" or "broker" under federal securities law.
This letter was submitted on Wednesday to SEC Commissioner Hester Peirce, who is also the chair of the "Cryptocurrency Working Group," co-signed by OpenSea's General Counsel Adele Faure and Deputy General Counsel Laura Brookover. It emphasizes that the NFT market operates on a completely different logic than the traditional financial system, and therefore should not be subject to the relevant provisions of federal securities law.
Regulatory Winds Shift, OpenSea Seizes the Opportunity
The SEC abandoned its investigation into OpenSea in February this year, due to the U.S. government's friendlier regulatory stance on cryptocurrency. As one of the first policy actions by President Trump ( Donald Trump, he instructed the SEC to clarify the agency's position on cryptocurrency and established a "cryptocurrency task force" to draft regulatory guidelines in collaboration with the industry.
For many years, the SEC has been criticized for its "regulation by enforcement" policy, and it has been recognized that the SEC is unable to articulate workable rules. Under the leadership of former Chairman Gary Gensler, the SEC's approach has been to classify all cryptocurrencies except Bitcoin as falling under its jurisdiction and subject to securities laws.
Require Regulation to Return to Its Essence and Eliminate Uncertainty
Adele Faure, the Chief Legal Officer of OpenSea, and Laura Brookover, the Deputy Chief Legal Officer, stated in a letter on Wednesday: "Law enforcement has previously expanded the regulatory scope of exchanges and brokers to include OpenSea, clearly focusing on broadening the committee's authority rather than addressing the specific risk conditions of the NFT market."
The OpenSea Advisory Committee rejects this practice and instead allows actual issues to guide regulatory solutions. Additionally, the committee's past enforcement policies have created uncertainty. Therefore, we urge the committee to eliminate this uncertainty and protect the leading position of American technology companies in this field.
Adele Faure and Laura Brookover argue that for exchanges like OpenSea, the title of "broker" is "unnecessary" because there are no underlying risks such as "conflicts of interest, financial instability, and misconduct" in the cryptocurrency ecosystem: the NFT market does not hold or facilitate the flow of funds or assets, thus cannot mix them, making capital requirements and financial records irrelevant. Additionally, OpenSea does not recommend making investments or executing trades on behalf of users.
Similarly, OpenSea should not be considered a "trading venue" for regulation like the New York Stock Exchange )NYSE(, because the transactions on the platform are executed automatically through immutable smart contracts, and the platform does not meet the "multiple sellers" requirement of the Securities Exchange Act.