May 2025, Washington, D.C. — Many non-fungible tokens (NFTs) do not fit the legal definition of securities, according to a major statement made by U.S. Securities and Exchange Commission (SEC) Commissioner Hester Peirce that may have an impact on the regulation of digital assets in the future.
Peirce addressed growing concerns about the lack of regulatory clarity surrounding digital assets, such as cryptocurrencies and NFTs, during his speech at the SEC Speaks 2025 event in Washington, D.C. Her comments follow a string of recent SEC enforcement actions that have raised questions about the proper classification of NFTs under federal law.
“Not All NFTs Are Securities”
According to Peirce, certain digital assets may still be considered securities based on how they are issued and sold, even though many NFTs are exempt from securities regulation. She specifically noted that NFTs that are distributed in a way that makes purchasers anticipate profits based on the work of a central organization may be considered investment contracts and thus come under SEC supervision.
“The determination must be based on how the asset is structured, marketed, and offered—not just on the label or type,” she said.
Enforcement Over Guidance Draws Criticism
The Commissioner criticized the SEC’s reliance on enforcement rather than providing proactive regulatory guidance. She argued that the current approach has left many developers and platforms navigating an uncertain legal landscape.
Peirce referenced the newly formed Crypto Task Force, which is actively gathering industry feedback with the goal of developing more comprehensive regulations for digital assets.
Renewed Push for “Safe Harbor” Framework
Reiterating her long-standing proposal for a Safe Harbor framework, Peirce advocated for giving crypto startups a defined period—typically three years—to build and decentralize their networks without having to register their tokens as securities.
Under the Safe Harbor model, projects would be expected to meet basic standards of disclosure and investor protection during their development phase. The framework aims to support innovation while ensuring transparency, though it has yet to be formally adopted by the SEC.
Implications for the NFT Industry
Many in the blockchain and NFT communities who have been looking for legal clarity have embraced Peirce’s comments. Although her position implies that NFTs are not securities by nature, she issued a warning that the distinction may become hazy based on marketing strategies and how earnings are presented to consumers.
Through upcoming SEC rulemaking or legislative action, the Commissioner emphasized the necessity of precise regulatory definitions. NFT creators and marketplaces will remain in a gray area until then, leaving them open to interpretation and potential enforcement measures.
Peirce’s remarks are a call for a more complex and open method of categorizing NFTs under US securities law as the regulatory environment for digital assets changes.
