The Digital Chamber (TDC) has called on Congress to pass legislation that would define certain non-fungible tokens (NFTs) as consumer goods and exempt them from federal securities laws.
This move follows growing concerns over the Securities and Exchange Commission’s (SEC) recent enforcement actions, including the issuance of a Wells Notice to NFT marketplace OpenSea.
Classifying NFTs
In a September 10 statement, TDC argued that NFTs made for consumer use, such as digital art, collectibles and video game items, should not be classified as financial products.
Instead, the group claims that these tokens should be treated like traditional consumer goods. The Digital Chamber emphasized that NFTs are often purchased for personal use and not for investment purposes, and that incidental resale for profit does not convert NFTs into securities.
According to the statement:
“TDC’s 2023 Pixels to Policy report shows that many NFT applications are clearly not designed as investment contracts or speculative financial instruments.”
The organization emphasized that the secondary market feature of NFTs, like traditional collectibles or works of art, does not necessarily make them financial products.
SEC overage
The Digital Chamber’s call comes amid a series of SEC actions targeting NFT platforms. Recent lawsuits against companies like DraftKings and Dapper Labs have raised alarms in the digital asset industry, with fears that too much scrutiny could stifle innovation.
The SEC’s recent enforcement actions against OpenSea, one of the largest NFT marketplaces, have further fueled concerns. TDC said:
“SEC Chairman Gary Gensler’s approach to regulation by enforcement has jeopardized the livelihoods of countless individuals who rely on NFTs to pursue their passions and support their businesses.”
The group warned that the current lack of regulatory clarity is pushing NFT makers and companies abroad, where regulations may be more favorable.
TDC urged Congress to clarify that consumer-use NFTs should not fall under the SEC’s authority, warning that continued uncertainty could harm the industry and the broader U.S. economy.