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.
The 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 statement released on Sept. 10, TDC argued that NFTs created for consumptive use, such as digital art, collectibles, and video game assets, should not be classified as financial products.
Instead, the group contends that these tokens should be treated like traditional consumer goods. The Digital Chamber emphasized that NFTs are often purchased for personal use rather than investment purposes, and occasional resales for profit do not transform them into securities.
According to the statement:
“TDC’s 2023 Pixels to Policy report found that many NFT applications are clearly not designed as investment contracts or speculative financial tools.”
The organization emphasized that the secondary market feature of NFTs, much like traditional collectibles or artwork, does not inherently make them financial products.
SEC overreach
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 alarm in the digital asset industry, with fears that regulatory overreach could stifle innovation.
The SEC’s recent enforcement action against OpenSea, one of the largest NFT marketplaces, have further fueled concerns. TDC said:
“SEC Chair Gary Gensler’s regulation-by-enforcement approach has jeopardized the livelihoods of countless individuals who rely on NFTs to pursue their passions and sustain their businesses.”
The group warned that the current lack of legislative clarity is pushing NFT creators and companies overseas, where regulations may be more favorable.
TDC urged Congress to clarify that consumptive-use NFTs should not fall under SEC authority, warning that continued uncertainty could harm the industry and the broader U.S. economy.