The Digital Chamber Advocates for Legislation to Define NFTs as Consumer Goods

The Digital Chamber (TDC) has taken a stand by calling on Congress to pass legislation that would categorize certain non-fungible tokens (NFTs) as consumer goods and therefore exempt them from federal securities laws. This move comes in response to the growing worries surrounding the Securities and Exchange Commission’s (SEC) recent actions, including sending a Wells notice to popular NFT marketplace OpenSea.

In a statement released on September 10th, TDC argued that NFTs, specifically those created for consumptive use such as digital art, collectibles, and video game assets, should not be considered financial products. Instead, the organization believes that these tokens should be treated as traditional consumer goods. They emphasized that NFTs are often bought for personal enjoyment rather than as investments, and occasional resales for profit should not classify them as securities. TDC’s 2023 Pixels to Policy report provided evidence that many NFT applications are not intended to be investment contracts or speculative financial tools.

The call from The Digital Chamber comes in the wake of a series of SEC actions targeting NFT platforms. Lawsuits against companies like DraftKings and Dapper Labs have raised concerns within the digital asset industry about regulatory overreach potentially hindering innovation. The recent enforcement action against OpenSea, a major NFT marketplace, has only added to these anxieties. TDC criticized SEC Chair Gary Gensler’s regulation-by-enforcement approach, stating that it has put at risk the livelihoods of numerous individuals who depend on NFTs for their passions and businesses.

TDC warned about the current lack of legislative clarity, which is driving NFT creators and companies to explore opportunities overseas where regulations may be more favorable. They urged Congress to clearly establish that consumptive-use NFTs should not be under SEC jurisdiction. The group highlighted that ongoing uncertainty could not only impact the NFT industry but also have broader repercussions on the U.S. economy.