The regulatory landscape for Web3 has shifted dramatically in 2025. For the first time in years, the U.S. Securities and Exchange Commission (SEC) has stepped back from aggressive NFT enforcement, closed high-profile investigations, and introduced a clearer framework to distinguish collectibles from securities.
For artists, NFT platforms, gaming studios, and blockchain developers, this shift offers relief – but not a free pass. Compliance remains essential, especially as the market revives under this more predictable environment.
This article summarizes the SEC’s updated approach, explains the new taxonomy, breaks down the difference between collectibles and securities, and shares actionable steps for Web3 builders.
(This is general information, not legal advice.)
The SEC’s Evolving Stance on NFTs: From Enforcement to Clarity
From 2023 through 2024, NFT creators faced significant regulatory pressure. The SEC pursued cases involving NFT “investment schemes,” revenue-sharing NFTs, and platforms facilitating secondary trading. Even major players like OpenSea found themselves under scrutiny.
But 2025 brought a decisive change.
Key Developments in 2025
• February 2025 – Major Withdrawals
Under the second Trump Administration and Acting Chair Mark Uyeda, the SEC dismissed its case against Coinbase and closed investigations into OpenSea and Robinhood’s crypto operations. Instead of litigation-heavy strategy, the agency launched a new Crypto Task Force focused on policy development and market clarity.
• September 2025 – Judicial Pushback
A federal court dismissed an anticipatory lawsuit filed by NFT artists Jonathan Mann and Bryan Frye. The court ruled that hypothetical fears of enforcement weren’t enough to challenge the SEC. The takeaway: enforcement has slowed, but clarity is still being built.
• November 2025 – “Project Crypto” Framework
Chairman Paul S. Atkins introduced a token taxonomy that categorizes most NFTs as digital collectibles, not securities. His statement – “Most crypto tokens are not securities” – sent a strong signal across the industry.
Result: A 30% Drop in Enforcement
SEC enforcement actions involving crypto and public companies fell sharply in 2025. Clear fraud is still pursued, but NFTs used for art, music, or digital ownership now face far less risk.
Defining Key Terms: NFTs, Securities, and the Howey Test
To interpret the 2025 taxonomy, it’s vital to understand the legal standards at play.
Non-Fungible Token (NFT)
A unique blockchain-based asset representing digital art, music, virtual items, access rights, or other forms of ownership.
Securities
Financial instruments that meet legal tests for regulated investments.
The Howey Test
Since 1946, the Howey Test has been the cornerstone of securities classification. Something becomes a security when it involves:
- Investment of money
- In a common enterprise
- With expectation of profits
- From the efforts of others
NFTs meet the definition only when they are marketed or structured like investment products.
The 2025 SEC Interpretation
Under Chairman Atkins’ taxonomy:
- Art, music, and collectibles without profit promises = NOT securities
- Revenue-sharing, yield-bearing, or pooled NFTs = securities
- Tokens can lose security status after initial promises are fulfilled
| Term | Definition | SEC 2025 Relevance |
| NFT | Unique digital asset on blockchain | Treated as collectible if utility/art based |
| Collectible | Item purchased for enjoyment or use | Explicitly not a security |
| Tokenized Security | NFT tied to financial rights | Regulated investment product |
| Howey Test | Legal standard for “investment contract” | Central criteria to classification |
Guidance on Collectibles vs. Securities
The SEC now emphasizes economic reality instead of labels. Under “Project Crypto,” NFTs fall into three buckets:
A) Collectibles – Non-Securities
Low-risk examples include:
- Art NFTs
- Music NFTs
- Trading cards
- In-game items
- Memes
- Event-access tokens
A musician releasing an album NFT with exclusive digital perks falls clearly into this category.
B) Securities – High-Risk
NFTs become securities when they involve:
- Revenue sharing
- Yield or staking rewards
- Fractionalized investment pools
- Promises of profit from the issuer
These require registration, disclosures, and SEC oversight.
C) Gray Areas
Projects with both utility and speculative appeal. In these cases, marketing, token design, and community expectations decide classification.
Practical Checklist
- Is any financial return promised? → Security
- Is value dependent on the promoter’s efforts? → Possible security
- Is it purely artistic or access-based? → Collectible
Implications for Web3: Opportunities and Lingering Risks
Opportunities
- NFT markets can innovate without heavy enforcement pressure.
- Platforms like OpenSea may see increased activity.
- U.S. signals align more closely with MiCA in Europe, creating cross-border consistency.
Risks That Still Exist
- Fraud enforcement continues aggressively.
- Yield-bearing NFTs remain fully regulated.
- Gray areas still require careful legal evaluation.
| Scenario | Classification | Compliance Steps | 2025 Example |
| Digital art drop | Collectible | Emphasize utility/creativity | Musician NFTs after Peirce’s remarks |
| Yield-bearing NFT | Security | Register + disclosures | Similar structures avoided post-Coinbase dismissal |
| Hybrid token | Case-by-case | Conduct Howey analysis | Mann/Frye lawsuit shows uncertainty |
Practical Tips for Web3 Compliance in 2025
✔ Audit your messaging
Avoid “investment,” “ROI,” “passive income,” “returns,” etc.
✔ Document intent
Show early that the project was designed for utility, access, or ownership – not investment.
✔ Track regulatory updates
Monitor SEC’s Crypto Task Force announcements.
✔ Budget for legal review
Initial audits typically cost $5,000–$20,000 depending on scope.
✔ Consider global rules
FATF recommendations influence U.S. enforcement regarding cross-border NFT sales.
How Cryptoverse Lawyers Can Assist
At Cryptoverse Lawyers, we support Web3 founders at every stage of compliance:
- Full Howey Test analysis for NFT and tokenized products
- Whitepaper and marketing review for regulatory safety
- Assistance with SEC no-action letters
- Representation in inquiries or enforcement situations
Reach out for a free initial consultation to safeguard your Web3 innovation.
Legal Disclaimer
This post offers general information as of December 12, 2025. It is not legal advice. Regulations evolve rapidly; consult qualified counsel for advice tailored to your circumstances.
FAQs
1. Has the SEC fully stopped NFT enforcement?
No. It has decreased significantly in 2025, but fraud remains a strict enforcement priority.
2. When is an NFT a security?
When it satisfies the Howey Test – especially profit expectations tied to issuer efforts.
3. What changed in 2025?
Case withdrawals (like OpenSea), the new token taxonomy, and a shift toward guidance instead of litigation.
4. Do all NFT creators need to register with the SEC?
Only projects classified as securities require registration.
5. How does U.S. policy affect global NFT platforms?
Reduced enforcement lowers cross-border compliance pressure, but marketing to U.S. users still requires care.
6. What’s next?
The SEC’s Crypto Task Force is expected to introduce more formal rules in 2026.