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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>
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