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[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 10544 Introduced in House (IH)]
<DOC>
118th CONGRESS
2d Session
H. R. 10544
To specify the treatment of covered non-fungible tokens under the
securities laws, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
December 20, 2024
Mr. Timmons (for himself and Mr. Torres of New York) introduced the
following bill; which was referred to the Committee on Financial
Services
_______________________________________________________________________
A BILL
To specify the treatment of covered non-fungible tokens under the
securities laws, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``New Frontiers in Technology Act''.
SEC. 2. TREATMENT OF COVERED NON-FUNGIBLE TOKENS UNDER THE SECURITIES
LAWS.
(a) In General.--For purposes of the securities laws--
(1) a covered non-fungible token is not an investment
contract; and
(2) an offer or sale of a covered non-fungible token is not
a transaction in a security.
(b) Definitions.--In this section and section 3:
(1) Covered non-fungible token.--
(A) In general.--The term ``covered non-fungible
token'' means any non-fungible token which was
developed primarily for personal, family, or household
consumption, including--
(i) a work of art, musical composition,
literary work, or other intellectual property;
(ii) a collectible, merchandise, virtual
land, or video game asset;
(iii) a digital identifier or other
certificate or credential;
(iv) an affinity, reward, or loyalty point;
or
(v) a right, license, membership, or
ticket.
(B) Exclusion.-- The term ``covered non-fungible
token'' does not include a non-fungible token that is
marketed by an issuer or promoter--
(i) primarily as an investment opportunity;
or
(ii) that promises future actions or a
series of actions designed explicitly and for
the purpose of increasing the value of the
covered non-fungible token.
(2) Non-fungible token.--
(A) In general.--The term ``non-fungible token''
means any asset--
(i) which is of such uniqueness or limited
production that it can be independently
assessed or identified;
(ii) which is represented by a unique
digital identifier;
(iii) the record of ownership of which is
recorded on a cryptographically secured public
distributed ledger;
(iv) which--
(I) is a digital equivalent of a
tangible or intangible good; or
(II) has some other inherent
function beyond the fact that the
record of ownership of the asset is
recorded on a cryptographically secure
public distributed ledger; and
(v) the record of which can be exclusively
possessed and transferred, person to person,
without necessary reliance on an intermediary.
(B) Exclusions.--The term ``non-fungible token''
does not include--
(i) any note, stock, treasury stock,
security future, security-based swap, bond,
debenture, evidence of indebtedness,
certificate of interest or participation in any
profit-sharing agreement, collateral-trust
certificate, preorganization certificate or
subscription, transferable share, put, call,
straddle, option, privilege on any security,
certificate of deposit, or group or index of
securities (including any interest therein or
based on the value thereof); or
(ii) any asset which, based on its terms
and other characteristics, is, represents, or
is functionally equivalent to an agreement,
contract, or transaction that is--
(I) a contract of sale of a
commodity (as defined under section 1a
of the Commodity Exchange Act) for
future delivery or an option thereon;
(II) a security futures product;
(III) a swap;
(IV) an agreement, contract, or
transaction described in section
2(c)(2)(C)(i) or 2(c)(2)(D)(i) of the
Commodity Exchange Act;
(V) a commodity option authorized
under section 4c of the Commodity
Exchange Act; or
(VI) a leverage transaction
authorized under section 19 of the
Commodity Exchange Act.
(C) Rule of construction.--Nothing in this
subsection may be construed to create a presumption
that a non-fungible token is a representation of any
type of security not excluded from the definition under
subparagraph (B).
(3) Securities laws.--The term ``securities laws'' has the
meaning given that term in section 3(a) of the Securities
Exchange Act of 1934.
SEC. 3. STUDY ON NON-FUNGIBLE TOKENS.
(a) In General.--The Comptroller General of the United States shall
carry out a study of non-fungible tokens that analyzes--
(1) the nature, size, role, purpose, and use of non-
fungible tokens;
(2) the similarities and differences between non-fungible
tokens and other digital assets, including payment stablecoins,
and how the markets for those digital assets intersect with
each other;
(3) how non-fungible tokens are minted by issuers and
subsequently administered to purchasers;
(4) how non-fungible tokens are stored after being
purchased by a consumer;
(5) the interoperability of non-fungible tokens between
different blockchain systems;
(6) the scalability of different non-fungible token
marketplaces;
(7) the benefits of non-fungible tokens, including
verifiable digital ownership;
(8) the risks of non-fungible tokens, including--
(A) intellectual property rights;
(B) cybersecurity risks; and
(C) market risks;
(9) whether and how non-fungible tokens have integrated
with traditional marketplaces, including those for music, real
estate, gaming, events, and travel;
(10) whether non-fungible tokens can be used to facilitate
commerce or other activities through the representation of
documents, identification, contracts, licenses, and other
commercial, government, or personal records;
(11) any potential risks to traditional markets from such
integration; and
(12) the levels and types of illicit activity in non-
fungible token markets.
(b) Report.--Not later than 1 year after the date of the enactment
of this Act, the Comptroller General shall make publicly available a
report that includes the results of the study required by subsection
(a).
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Financial Services.
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