The Digital Chamber (TDC) has referred to as on Congress to cross laws that may outline sure non-fungible tokens (NFTs) as shopper items and exempt them from federal securities legal guidelines.
The transfer follows rising considerations over the Securities and Trade Fee’s (SEC) latest enforcement actions, together with the issuance of a Wells discover to NFT market OpenSea.
Classifying NFTs
In a press release launched on Sept. 10, TDC argued that NFTs created for consumptive use, equivalent to digital artwork, collectibles, and online game belongings, shouldn’t be categorized as monetary merchandise.
As a substitute, the group contends that these tokens needs to be handled like conventional shopper items. The Digital Chamber emphasised that NFTs are sometimes bought for private use reasonably than funding functions, and occasional resales for revenue don’t rework them into securities.
In line with the assertion:
“TDC’s 2023 Pixels to Coverage report discovered that many NFT functions are clearly not designed as funding contracts or speculative monetary instruments.”
The group emphasised that the secondary market function of NFTs, very like conventional collectibles or paintings, doesn’t inherently make them monetary merchandise.
SEC overreach
The Digital Chamber’s name comes amid a sequence of SEC actions concentrating on NFT platforms. Current lawsuits towards firms like DraftKings and Dapper Labs have raised alarm within the digital asset business, with fears that regulatory overreach might stifle innovation.
The SEC’s latest enforcement motion towards OpenSea, one of many largest NFT marketplaces, have additional fueled considerations. TDC mentioned:
“SEC Chair Gary Gensler’s regulation-by-enforcement strategy has jeopardized the livelihoods of numerous people who depend on NFTs to pursue their passions and maintain their companies.”
The group warned that the present lack of legislative readability is pushing NFT creators and firms abroad, the place rules could also be extra favorable.
TDC urged Congress to make clear that consumptive-use NFTs shouldn’t fall below SEC authority, warning that continued uncertainty might hurt the business and the broader U.S. economic system.