The world’s largest non-fungible token (NFT) marketplace OpenSea is doing its part. Most importantly, they have challenged the SEC to provide clear guidance to help regulate marketplaces that endanger America’s innovators with uncertainty. In addition, the company is asking the SEC to exempt NFT marketplaces from its proposed new broker regulations under federal securities laws.
We applaud OpenSea’s General Counsel, Adele Faure, and Deputy General Counsel, Laura Brookover, for issuing this formal request. They seek to resolve the current regulatory uncertainty regarding the application of federal securities laws to NFT marketplaces. Further, OpenSea argues that it does not satisfy the legal definition of an exchange under US securities laws. The company is very clear that it does not process trades. It does not serve as a market maker and a counter party to multiple sellers for the same asset.
OpenSea, a US-based technology company, has been under investigation for potential violations of US securities law. In this light the SEC’s recent dismissal of several enforcement actions against crypto firms—including one against OpenSea—seems particularly notable.
We ask the SEC to clear the existing industry confusion on this issue by publishing informal guidance. In the longer term, we invite the Commission to exempt NFT marketplaces like OpenSea from proposed broker regulation. - Faure and Brookover
The tech firm is encouraging the SEC to issue informal guidance for creators and operators of NFT marketplaces. They argue that these marketplaces should remain free from regulation under federal securities laws.
The company is asking the SEC to issue informal guidance on NFT marketplaces and believes the SEC should exempt NFT marketplaces from regulation under federal securities laws.
The Commission’s past enforcement agenda has created uncertainty. We therefore urge the Commission to remove this uncertainty and protect the ability of US technology companies to lead in this space. - Faure and Brookover
In preparing this guidance, the Crypto Task Force should specifically address the application of exchange regulations to marketplaces for non-fungible assets, similar to the recent staff statements on memecoins and stablecoins. - Faure and Brookover
