- NFT Act Aims to Protect Artistic and Intellectual Use Cases
- SEC Cracks Down on NFTs Amid New Bill Discussion
- Industry Reaction to SEC Actions
The U.S. organization Digital Chamber is calling on crypto users to support a new bill aimed at classifying non-fungible tokens (NFTs) based on their use cases. The goal is to protect the burgeoning NFT industry from stringent securities regulations.
NFT Act Aims to Protect Artistic and Intellectual Use Cases
Last week, the organization urged Congress to define some NFTs as consumer products, exempting them from federal securities laws. Digital Chamber argued that many NFTs, like art and traditional collectibles, should be treated as consumer goods, not securities. U.S. Representative William Timmons introduced the New Frontiers in Technology Act (NFT Act), which is designed to address the legal and regulatory classification of NFTs. The NFT Act, according to the Digital Chamber, safeguards 'covered NFTs' by defining them as items primarily used for artistic, musical, literary, or intellectual purposes. It also extends protection to NFTs related to rewards, rights, licenses, or tickets. However, this bill would not protect NFTs marketed as investment products with the promise of financial gain. Additionally, the Act promotes education by instructing the U.S. Comptroller General to conduct a study on NFTs once the bill is passed.
SEC Cracks Down on NFTs Amid New Bill Discussion
This legislative push follows recent actions by the U.S. Securities and Exchange Commission (SEC) against NFT platforms. On Aug. 28, the SEC issued a Wells notice to OpenSea, signaling potential enforcement actions. On Sept. 17, the SEC fined Flyfish Club $750,000 for selling NFTs, which the agency argued violated securities laws. According to a cease and desist order issued on September 16, the SEC stated that Flyfish 'conducted an unregistered offering of crypto asset securities' by selling 1,600 NFTs to US investors and earning $14.8 million at two pricing points.
Industry Reaction to SEC Actions
Leading figures in the industry have shared their thoughts on SEC actions. Wendy O, host of CryptoWendyO, shared her thoughts: 'I just think it’s absolutely ridiculous… the public servants really haven’t done that great of a job of providing any kind of guidance… we’re seeing a direct attack on American entrepreneurs. To me, it’s an epic fail… there’s bad actors in every single industry, but to go after one of the largest platforms is absolutely ridiculous and absurd.'
The new legislative project promises significant changes in NFT regulation. While some see it as a step forward in protecting consumer rights and fostering innovation, others criticize the strict regulatory measures that may hinder industry growth.
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