In the ever-evolving world of crypto, NFTs are at a crossroads—will they be seen as art and collectibles, or fall under the weight of securities laws?
The blockchain advocacy group, Digital Chamber, is rallying U.S. crypto users to throw their weight behind a new bill that aims to classify NFTs (non-fungible tokens) based on how they’re used.
On September 10, the Chamber called on Congress to step up and define certain NFTs as consumer products—a move that would free them from the grasp of federal securities laws.
The organization argues that many NFTs, much like traditional art or collectibles, shouldn’t be lumped together with securities.
In response, U.S. Representative William Timmons introduced the New Frontiers in Technology Act (NFT Act), which seeks to clarify how NFTs are regulated. The bill specifically protects “covered NFTs,” which include things like art, music, literary works, virtual merchandise, video game assets, and even virtual land.
These NFTs, being primarily creative or intellectual property, would be shielded under the Act.
But here’s the catch: NFTs that are marketed with a focus on potential investment gains are not covered by these protections.
What’s more, the bill doesn’t just stop at protection—it also directs the U.S. Comptroller General to study the NFT space after the bill is passed, adding a layer of ongoing education and insight into how these digital assets evolve.
As per cryptocurrency news today, the Digital Chamber is calling on the U.S. crypto community to voice their support for the NFT Act, stressing that it could help prevent regulatory missteps that might otherwise stifle innovation. Backing this legislation, they argue, will promote technological progress, boost consumer protection, and keep blockchain innovation firmly rooted in the U.S.
This all comes at a time when the SEC is cracking down hard on NFTs. On August 28, the SEC issued a Wells notice to OpenSea, hinting that enforcement actions could be on the way for the popular NFT marketplace.
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Then, on September 17, the SEC fined Flyfish Club $750,000 for selling NFTs, despite pushback from SEC commissioners who argued that the tokens were just another way to sell memberships—not securities.
The stakes are high, and with the future of NFTs hanging in the balance, the industry is pushing for clarity before innovation gets caught in the crossfire of regulation.
