Digital room (TDC) has asked 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 about recent enforcement actions by the Securities and Exchange Commission (SEC), including the issuance of a Wales notice to the OpenSea NFT market.
Classification of NFTs
In a statement released on September 10, the TDC argued that NFTs created for consumer use, such as digital art, collectibles and video game assets, should not be classified as financial products.
Instead, the group claims, these tokens should be treated as such Traditional consumer goods. The Digital Chamber emphasized that NFTs are often purchased for personal use rather than investment purposes, and that occasional resale for profit does not make them securities.
According to the statement:
“TDC's Pixels to Policy 2023 report found that many NFT programs are clearly not designed as investment contracts or speculative financial instruments.”
It emphasized that the secondary market nature of NFTs, such as traditional collectibles or works of art, does not inherently make them financial products.
Too much SEC
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 concerns that too much regulation could stifle innovation.
Recent SEC Executive action against open seaOne of the largest NFT markets has raised concerns. TDC said:
“SEC Chairman Gary Gensler's regulatory approach to enforcement has jeopardized the livelihoods of countless individuals who rely on NFTs to pursue their interests and maintain their businesses.”
The group warned that the current lack of legal clarity is driving NFT manufacturers and companies overseas, where regulations may be more favorable.
TDC called on Congress to clarify that consumer NFTs should not be subject to SEC jurisdiction, warning that continued uncertainty could harm the industry and the US economy.
