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Digital Chamber urges Congress to clarify NFT rules amid SEC scrutiny

GrafaGrafa2024/09/11 02:15
By:Mahathir Bayena

The Digital Chamber of Commerce, a blockchain advocacy group, is pushing Congress to take a stand on how non-fungible tokens (NFTs) are regulated.

The group wants lawmakers to clearly define NFTs as consumer products, exempting them from being treated as securities.

This call to action comes after the U.S. Securities and Exchange Commission (SEC) recently sent a Wells notice to OpenSea, signaling a potential crackdown on the NFT marketplace.

In its statement on September 10, the Digital Chamber described the SEC’s move as an "overreach into the digital asset industry."

Although the SEC hasn't taken OpenSea to court yet, the notice suggests that an enforcement action could be on the horizon.

The Digital Chamber argues that most NFTs aren’t designed to be investment vehicles or financial instruments.

Instead, they should be seen more like collectibles or art.

“Many NFT applications are clearly not designed as investment contracts or financial tools for speculation, even if consumers occasionally sell NFTs for a profit, much like traditional collectibles or artwork,” the group stated.

They criticised SEC Chair Gary Gensler’s strategy of regulating through enforcement, saying that without clear rules from Congress, this approach is putting the industry at risk.

OpenSea’s CEO, Devin Finzer, described receiving the Wells notice on August 28 as “a move into uncharted territory.”

This is not the first time the SEC has targeted NFTs; both Dapper Labs and DraftKings have faced similar scrutiny for allegedly selling unregistered securities.

In 2023, the SEC fined Impact Theory over $6 million for unregistered sales of its Founder’s Keys NFTs.

As the 2024 U.S. presidential election approaches, the future of NFT regulation remains uncertain.

Donald Trump has vowed to fire Gensler if he wins the election, while some in the industry speculate that Kamala Harris, if elected, could take a different regulatory path than the current administration.

This has added a new layer of unpredictability to how NFTs will be treated under U.S. law moving forward.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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