Digital Chamber Calls American Crypto Users to Support New NFT Bill

Following the introduction of a new NFT bill by U.S. Representative William Timmons, the Digital Chamber urged U.S. crypto users on September 16 to rally behind the legislation.

The blockchain advocacy group appealed to the public to support the bill, which seeks to classify non-fungible tokens (NFTs) based on their intended use cases, as regulatory scrutiny grows.

New NFT Bill Gains Momentum in Congress

The Digital Chamber released a statement on September 16 commending Representative William Timmons for introducing the New Frontiers in Technology Act (NFT Act) and urging the public to rally behind the bill.

TDC supports the "New Frontiers in Technology (NFT) Act." This proposal is a crucial step in clarifying the regulatory landscape for NFTs and addressing the @SECGovs’s overreach. We commend @RepTimmons for his leadership in drafting this bill. https://t.co/fRPA8Q4P9K pic.twitter.com/t24QqrYXfp

— The Digital Chamber (@DigitalChamber) September 16, 2024

This bill seeks to define and regulate NFTs by categorizing them based on their use, a move that many see as critical to providing legal clarity amid increasing scrutiny from U.S. regulators like the Securities and Exchange Commission (SEC).

The bill proposes that certain NFTs, such as those functioning as artwork, music, literature, or intellectual property, should be classified as collectibles and therefore exempt from federal securities laws.

This would reduce the legal burden on creators and buyers of digital collectibles.

However, the bill makes a clear distinction that NFTs marketed as investment vehicles would not be protected.

The NFT Act also calls for a study by the U.S. Comptroller General to analyze the impact of NFTs, encouraging a better understanding of how to regulate them within the blockchain space.

Q: Could the infra bill apply to NFTs?

A: Yes.

The bill defines "digital asset" broadly, as "any digital representation of value…recorded on a cryptographically secured distributed ledger[.]"

If Treasury says this includes NFTs, then NFT issuers, merchants, etc. are brokers.

— Jake Chervinsky (@jchervinsky) July 31, 2021

The Digital Chamber stressed the importance of public support for the NFT bill, urging crypto users to contact their representatives.

According to the advocacy group, supporting this bill will help ensure that blockchain technology can thrive within a clear and fair regulatory environment.

SEC’s Crackdown on NFTs and the Implications for the Digital Asset Market

The Digital Chamber’s appeal comes at a time when the SEC has increased its focus on the NFT market.

🚨 @opensea has received a Wells notice from the @SECGov, signaling potential legal action over alleged securities violations related to NFTs. 🎨💔#CryptoRegulations #NFTshttps://t.co/Kr2dmQxiXo

— Cryptonews.com (@cryptonews) August 28, 2024

In August, the SEC issued a Wells notice to NFT marketplace OpenSea, signaling potential enforcement actions.

Additionally, the SEC recently fined Flyfish Club $750,000 for the unregistered sale of NFTs linked to exclusive dining memberships.

Critics argue that the SEC’s actions under Chair Gary Gensler are overly aggressive and could stifle innovation in the digital asset space.

In response to these concerns, Congress has scheduled a hearing titled “Dazed and Confused: Breaking Down the SEC’s Politicized Approach to Digital Assets,” which will examine the broader implications of the SEC’s regulatory stance on the blockchain industry.