NFTs after CLARITY

June 26, 2026

The SEC’s pre-CLARITY NFT enforcement posture was the most internally inconsistent line in the Commission’s digital-asset program. In August 2023, the Commission settled charges against Impact Theory for $6.1 million in SEC v. Impact Theory, LLC, Securities Act Release No. 11226, on the theory that Founder’s Key NFTs were unregistered securities offerings because purchasers expected the project’s developers to use proceeds to build value. A month later, the Commission settled with Stoner Cats on similar theories. Friel v. Dapper Labs, Inc., 657 F. Supp. 3d 422 (S.D.N.Y. 2023), denied a motion to dismiss NBA Top Shot Moments claims under the same theory, holding that the plaintiffs had plausibly alleged an investment contract. Then the Commission closed its investigation into Yuga Labs without enforcement, sent a Wells notice to OpenSea in early 2024 followed by closure of that investigation, and issued a February 2025 staff statement disclaiming enforcement intent against certain categories of NFT activity. By the time CLARITY was engrossed, the NFT regulatory framework was a function of which Commission was holding the pen and how the staff was reading Howey in any given week.

§602 of CLARITY would end the enforcement-discretion era. It defines an NFT through four traits, creates a strong safe harbor with three narrow exceptions, and provides a good-faith-reliance protection that immunizes parties who reasonably rely on the safe harbor. The structural choice is to draw a categorical line, leaving discretionary case-by-case enforcement only for transactions that genuinely involve all the elements of an investment contract. The §602(b)(4) reliance and prospective-effect provisions go further than most CLARITY provisions in giving issuers and platforms confidence about ongoing operations.

The joint SEC-CFTC interpretation effective March 23, 2026, Release Nos. 33-11412 and 34-105020, complements §602 with an interpretive framework that operates at the Howey analytical level. The release classifies crypto assets into five categories, including “digital collectibles,” which the Commission concludes do not themselves constitute securities because they lack the economic characteristics of a security. The illustrative examples in the release include CryptoPunks, Chromie Squiggles, Fan Tokens, WIF, and VCOIN. The release reaches the same bottom-line conclusion as §602 (an NFT itself is not a security) but through a different mechanism: §602 operates as a statutory safe harbor with enumerated exceptions, while the release operates as a Commission interpretation of Howey applied to the digital-collectible category. The two frameworks complement each other. The §602 safe harbor is the primary protection; the joint release supplies the doctrinal foundation and applies even to NFTs that, for whatever reason, fall outside §602’s literal scope.

The Four-Prong NFT Definition

§602(a)(1) defines an NFT through four conjunctive elements. The asset must be recorded on a distributed ledger; (A) individually identifiable and distinguishable from any other digital asset; (B) represent ownership of, or rights in, a work of authorship, art, a collectible, a membership, an access credential, a certificate of authenticity, an in-game or in-application item, or another similar specific item or discrete digital or physical good, service, or benefit; (C) not interchangeable on a 1-to-1 basis with any other token or digital asset; and (D) capable of being bought, sold, or transferred for consideration.

• (A) excludes mass-issued fungible tokens that share identical traits and serial numbers; the asset must be distinguishable from every other asset in the collection. The standard ERC-721 implementation satisfies (A) because each token has a unique tokenId and corresponding metadata. ERC-1155 semi-fungible implementations may or may not satisfy (A) depending on whether the contract issues distinguishable token IDs for each unit or issues fungible balances within a token class.
• (B) is the use-case enumeration. The list is broad and intentionally so. Art, collectibles, memberships, access credentials, certificates of authenticity, in-game items, and the “similar specific item” residual cover almost every meaningful NFT use case in current practice. The PFP collections (Bored Apes, CryptoPunks, Pudgy Penguins) qualify under “art” or “collectible.” Ticketing NFTs qualify under “access credential.” Membership NFTs (the various creator-economy memberships and on-chain subscriptions) qualify under “membership.” In-game items qualify under “in-game or in-application item.” Identity credentials, qualifications, and certifications qualify under “certificate of authenticity.” The use-case enumeration is permissive: an asset that fits within one of these categories is an NFT for §602 purposes.
• (C) is the non-fungibility test. The asset must not be interchangeable on a 1-to-1 basis with any other token or digital asset. This is the structural antifeature: NFTs cannot be perfect substitutes for other tokens. A token that trades 1-for-1 with any other token in the collection (semi-fungible tokens with no meaningful distinguishing traits) does not satisfy (C). The non-fungibility test screens out attempts to call mass-fungible token collections “NFTs” simply by adding nominal serial numbers.
• (D) requires that the asset be capable of being bought, sold, or transferred for consideration. Soulbound tokens, which by design cannot be transferred, do not satisfy (D) and are not NFTs for §602 purposes. The exclusion is not a substantive problem because soulbound tokens are not the subject of the safe harbor (they are not “offered, sold, resold, transferred, or conveyed” in any commercial sense).

§602(a)(2) defines “promoter” as a person or group that manages, controls, or operates an enterprise in which capital is invested, or any person acting on behalf of such a person, including affiliates, agents, and coordinated actors that contribute to capital-raising efforts. The promoter concept is doing important work in the rules-of-construction section, where the resale carve-out is conditioned on payment not flowing to a promoter.

The §602(b)(1) Safe Harbor and the §602(b)(2) Rules of Construction

§602(b)(1) is the operative safe-harbor provision. The offer, sale, resale, transfer, or conveyance of an NFT shall not be deemed to constitute an offer, sale, or distribution of a security or investment contract under the Securities Act, the Exchange Act, or any equivalent state law, unless the transaction, in substance, involves all of the elements of an investment contract. The exception clause is the key. The safe harbor falls only when the transaction involves all of the Howey elements: investment of money, common enterprise, expectation of profits, derived from the efforts of others. A transaction that lacks any one element is within the safe harbor.

§602(b)(2) provides two rules of construction. Subsection (A) excludes from securities treatment “the resale or secondary market transfer of a nonfungible token, where the payment for that resale or transfer does not flow to a promoter or is not used to raise new capital for an enterprise.” The resale carve-out is structurally important. It preserves secondary-market activity even where the primary issuance might have involved investment-contract elements. As long as the payment is between private parties and does not flow back to the promoter or fund new enterprise capital, the secondary transaction is outside the securities perimeter.

Subsection (B) addresses the collectible-appreciation question. An NFT that serves as a collectible, membership right, event ticket, access credential, or other non-investment-based use case is not a security solely because the NFT may appreciate in value or depend in part on continued efforts or the reputation of the creator or issuer. The clause is the legislative answer to the Friel v. Dapper Labs line of reasoning. Under Friel, the fact that Top Shot Moments could appreciate in value, combined with Dapper Labs’ continued maintenance of the platform and curation of the marketplace, was enough to plausibly allege investment-contract elements. §602(b)(2)(B) would override that holding by statute: appreciation and creator-effort-dependence are not, by themselves, sufficient to convert a use-case NFT into a security.

The Three Exceptions

§602(b)(3) carves out three categories where the safe harbor does not apply. The exceptions are narrow and structurally important.

The first exception, §602(b)(3)(A), covers “a mass-minted series of items with substantially similar or nearly identical traits that are marketed or sold interchangeably.” This is the structurally important carve-out. The exception captures the variant of NFT issuance that most resembles a securities offering: a mass issuance of fungible-in-substance tokens with nominal trait differences, marketed as a pooled investment opportunity. The Founder’s Keys and Stoner Cats fact patterns fall within this exception, because the NFTs in those collections shared substantially similar traits and were marketed to purchasers as a coordinated investment in the project’s development.

The “substantially similar or nearly identical traits” phrasing is the operative limit. PFP collections with meaningful trait diversity (Bored Apes, CryptoPunks, the generative-art collections produced by Art Blocks artists) do not fit the exception, because the individual items have distinguishing traits that distinguish them in commercial trade. The collection is non-fungible at the item level. Generative-art drops in which each item has a unique seed but the trait distribution is engineered to produce many “similar” items might be on the edge; the marketing-and-sale-interchangeably qualifier helps draw the line.

The “marketed or sold interchangeably” qualifier is the second operative limit. An NFT collection with distinct traits sold under a single price (a flat mint price for the entire collection) is, on one reading, marketed interchangeably. A collection sold under a price-discrimination scheme based on trait rarity is not. The SEC’s pre-CLARITY enforcement actions tended to involve collections sold at a flat mint price, with the value distinction emerging post-mint based on trait rarity and project development. Those fact patterns map closer to the §602(b)(3)(A) exception than do collections sold under sophisticated trait-based pricing.

The second exception, §602(b)(3)(B), covers “a fractionalized interest in a nonfungible token.” Fractional NFTs (e.g., the historical fractional.art platform model and similar successor models) are not within the safe harbor. The reason is structural: a fractional interest in an underlying asset is an investment in the underlying asset, not a holding of the asset itself. The fractional interest carries economic exposure to the asset’s value without the asset’s specific use rights. The fractional-NFT model resembles a pooled investment vehicle, and the §602(b)(3)(B) exception treats it as such.

The third exception, §602(b)(3)(C), covers “an interest representing a beneficial or economic claim on a nonfungible token or an asset that a nonfungible token represents.” This is broader than (B) and catches derivative instruments on NFTs as well as fractional interests. A token that conveys an economic right to the appreciation of an NFT, or to the appreciation of the underlying asset the NFT represents, is excluded from the safe harbor. The drafting choice prevents the NFT safe harbor from being used to immunize what are, in economic substance, securities derivatives on NFTs.

§602(b)(4) Reliance and Prospective Effect

§602(b)(4) is the unusually generous reliance provision. §602(b)(4)(A) provides that “a person, other than an originator or related person, that reasonably and in good faith relies on the safe harbor under this subsection shall not be subject to any civil or administrative penalties.” The reliance protection is broader than the typical good-faith-reliance safe harbor in CLARITY. The structural choice is to immunize platforms, marketplaces, and other downstream participants who reasonably rely on the safe harbor as to a particular NFT.

The exclusion of originators and related persons is important. An NFT issuer cannot rely on §602(b)(4)(A) to immunize itself from penalties for its own issuance. But a platform that lists the NFT, a marketplace that facilitates resale, an exchange that holds the NFT for customers, or a custodian that provides storage services can rely on the safe harbor. The structural effect is to make platform-level compliance defensible: a platform that maintains a reasonable belief that an NFT qualifies for the safe harbor is not subject to penalty even if the SEC later determines that the safe harbor does not apply.

§602(b)(4)(B) provides the prospective-effect rule. Any determination by the Commission that the safe harbor does not apply to a particular circumstance must be prospective only and must take effect not earlier than 60 days after the Commission publicly posts the determination. The provision prevents the Commission from making post-hoc determinations that the safe harbor did not apply, with retroactive enforcement consequences. The 60-day notice period gives parties time to adjust their conduct or wind down non-compliant offerings.

The combined effect of §602(b)(4)(A) and (B) is to provide a strong front-end protection for NFT marketplaces, platforms, and downstream participants. Reasonable good-faith reliance is protected, and any change in the Commission’s interpretation runs prospectively with at least 60 days’ notice. The structural commitment to operational stability for the NFT secondary market is meaningful.

The Mass-Minted Series Problem

The §602(b)(3)(A) mass-minted-series exception is the operationally significant edge. It is also the most fact-intensive of the three exceptions. Three structural questions follow.

• First, what counts as “substantially similar or nearly identical traits”? A collection of 10,000 PFPs generated from 200 traits across 8 trait categories, with rarity distributions producing meaningful variation in the resulting items, is not “substantially similar.” A collection of 10,000 nominally distinct items where the variation is limited to a serial number or a single trait category (color variations on the same base image) might be. The Commission’s eventual rulemaking or interpretive guidance will need to draw the line, and the line will turn on whether the traits produce commercially meaningful distinctions between items.
• Second, what counts as “marketed or sold interchangeably”? A mint at a flat price where all items are offered without trait disclosure (”blind mint”) and the items are randomly assigned post-mint may be marketed interchangeably even if the resulting items have meaningfully distinct traits. The marketing assesses interchangeability ex ante; the resulting trait diversity may or may not redeem the marketing. A reveal-on-mint structure where buyers can see traits before purchasing, with trait-based pricing, is not marketed interchangeably.
• Third, how does the exception interact with project-development marketing? A project that markets a mass-minted collection as a vehicle for funding ongoing development, with the buyers receiving a “stake” in the project’s success, is closer to the SEC’s pre-CLARITY enforcement targets. A project that markets a collection as a collectible or membership without development-funding implications is further from those targets. The marketing analysis is similar to the §4B(a)(7)(B) disqualifying-rights analysis: what is being sold, and what economic rights does the purchaser actually receive?

An issuer that wants to stay inside the safe harbor should design collections with meaningful trait diversity, price items based on trait rarity where the trait structure permits, and market the collection as a collectible or use-case product rather than as a development-funding mechanism. Projects that follow this design pattern sit comfortably within the safe harbor. Projects that follow the pre-CLARITY mass-mint-with-development-promise model are at risk under the §602(b)(3)(A) exception.

The Resale Carve-Out and OpenSea/Blur

§602(b)(2)(A) preserves resale and secondary-market transfers where payment does not flow to a promoter and is not used to raise new capital for an enterprise. The carve-out is structurally important for the secondary-market platforms (OpenSea, Blur, Magic Eden, and their successors). A secondary transaction between two retail collectors, with payment flowing between them and not to the original promoter, is outside the securities perimeter regardless of how the primary issuance is characterized.

The exception has implications for royalty enforcement, an issue that consumed substantial industry attention in 2022-2024 as OpenSea moved away from creator royalty enforcement and Blur built its market position partly on its zero-royalty model. The §602(b)(2)(A) carve-out treats “payment for that resale or transfer” as not flowing to a promoter, even if a portion of the payment is allocated to a royalty to the original creator. The royalty is paid by the seller, not by the platform, and the §602 analysis treats the royalty as a private contractual arrangement between buyer and seller rather than as a continuation of the primary offering.

The §602(b)(2)(A) carve-out also has implications for revenue-sharing structures embedded in NFT smart contracts. A collection that includes a smart-contract-enforced royalty paid to a multisig controlled by the creator team is operating under a structure where the payment, in part, flows to a promoter. The §602(b)(2)(A) carve-out language (”does not flow to a promoter or is not used to raise new capital for an enterprise”) is disjunctive: a resale where the payment does not flow to a promoter (in any part) is within the carve-out, and a resale where the payment is not used to raise new capital (even if some flows to a promoter as a royalty for past creative work, not new capital-raising) is also within the carve-out. The structural reading is that creator royalties on resales remain compatible with the safe harbor as long as the royalties compensate past creative effort rather than fund ongoing capital-raising for the enterprise.

Fractional NFTs and Beneficial-Claim Derivatives

§602(b)(3)(B) and (C) cover the fractional and beneficial-claim categories. The structural intent is to prevent the NFT safe harbor from being used to immunize what are, in economic substance, securities offerings of fractional interests in collectibles. Fractional.art-style platforms that fractionalized high-value NFTs (CryptoPunks, Bored Apes) into ERC-20-equivalent tokens were operating under pre-CLARITY uncertainty about whether the fractional tokens were securities. §602(b)(3)(B) would resolve the question: fractional interests are not within the NFT safe harbor.

The exception does not categorically prohibit fractional NFTs or beneficial-claim derivatives. It simply removes them from the NFT safe harbor. A fractional NFT may be a security; it may be structured as a permitted offering under Reg D, Reg A, or another exemption; it may be a network token if the underlying NFT collection is held by a properly-constituted DGS and the fractional token has the right economic characteristics. The §602(b)(3)(B) exception means that the fractional token’s securities analysis runs on the §4B network-token framework or on the general securities-law analysis, not on the §602 NFT safe harbor.

The beneficial-claim exception under §602(b)(3)(C) is broader and catches NFT derivatives, NFT-collateralized lending tokens, and NFT-yield products. The exception is structurally important because these products are economic exposures to NFTs rather than ownership of NFTs themselves. The securities analysis runs on the structure of the derivative, not on the safe harbor.

§603 GAO Study

§603 directs the GAO to conduct a study of NFTs covering the nature, size, role, purpose, and use of NFTs; the similarities and differences between NFTs and other digital assets; minting and administration mechanics; storage; interoperability; marketplace scalability; benefits including verifiable digital ownership; risks including intellectual property, cybersecurity, and market risks; integration with traditional markets (music, real estate, gaming, events, travel); use for documents, identification, contracts, licenses, and other records; risks to traditional markets from integration; and levels and types of illicit activity in NFT markets. The GAO is required to publicly release the study within one year of enactment.

The §603 study is the bill’s signal that NFT policy is not settled. The §602 safe harbor is the doctrinal answer for the current market structure. The §603 study is the framework for evaluating whether the safe harbor is appropriately calibrated as the market matures. The §603 study will feed any future revisions of the §602 framework, and the comment-letter cycle around the GAO study itself will be substantive.

Where this Leaves Issuers and Platforms

The practical structure reduces to four points.

• First, the safe harbor is broad and the exceptions are narrow. Most NFT activity in the current market structure is within the safe harbor. Mass-minted collections with substantial trait diversity, marketed and sold under trait-aware pricing, are within the safe harbor. Resale activity is within the safe harbor regardless of the primary issuance’s status, provided the payment doesn’t flow to a promoter or fund new capital-raising.
• Second, the §602(b)(3)(A) mass-minted-series exception is the principal compliance concern for new issuance. Design choices that produce meaningful trait diversity and that price items based on rarity push offerings further from the exception. Marketing focused on the collection’s use case (art, collectible, membership, access credential) rather than on project-development funding pushes offerings further from the exception. The pre-CLARITY enforcement targets (Founder’s Keys, Stoner Cats) fit the exception; well-designed art-and-collectible drops do not.
• Third, fractional-interest and derivative products are outside the safe harbor. Issuers contemplating these products should plan to comply with the general securities-law framework, including possible registration, exemption-based offerings under Reg D or Reg A, or §4B network-token treatment if the structural conditions are met. The §602 safe harbor does not cover them.
• Fourth, the §602(b)(4) reliance protection is operationally significant. Platforms and marketplaces that maintain reasonable good-faith reliance on the safe harbor for the NFTs they list, custody, or facilitate are protected from penalty exposure even if the Commission later determines that the safe harbor does not apply to a particular collection. Platforms should maintain documentation of the reasonable-belief analysis for each listed collection and monitor SEC pronouncements for prospective changes.

The §602 framework would substantially resolve the NFT regulatory uncertainty that consumed industry attention from 2021 to 2025. The safe harbor is broad, the exceptions are narrow and fact-specific, and the reliance protection is generous. The remaining work is at the margin: drawing the mass-minted-series line, addressing fractional NFTs and derivatives, and integrating NFT activity with the broader CLARITY framework. If the bill is signed, the Commission’s enforcement-discretion era for NFTs is over, and the statutory framework that replaces it is materially more accommodating of legitimate NFT activity than the pre-CLARITY enforcement posture suggested.

Written by David Lopez Kurtz