⚖️📚Some #legal thoughts on #NFTs 👇
1️⃣ Generally NFTs will NOT constitute securities (in US or UK)
🇺🇸Not ‘investment contracts’ (under #Howey test)
🇬🇧Not security tokens or e-money tokens, and so are ‘unregulated tokens’
(1 of 6) @OVioHQ @jamie247
1️⃣ Generally NFTs will NOT constitute securities (in US or UK)
🇺🇸Not ‘investment contracts’ (under #Howey test)
🇬🇧Not security tokens or e-money tokens, and so are ‘unregulated tokens’
(1 of 6) @OVioHQ @jamie247
2️⃣🚨#NFTs CAN be securities in certain circumstances
For example:
* fractionalised NFTs embodying rights to royalties; or
* NFTs sold with promise of future liquidity & continued services from issuer
Just calling something an NFT doesn’t change its underlying nature
(2 of 6)
For example:
* fractionalised NFTs embodying rights to royalties; or
* NFTs sold with promise of future liquidity & continued services from issuer
Just calling something an NFT doesn’t change its underlying nature
(2 of 6)
3️⃣🤯Interaction between IP laws and #NFTs is COMPLICATED
By default ownership of #NFT = ownership of the token itself, NOT of the underlying work (or copyright/other IP rights in it)
That ownership remains with the original creator of the work
(3 of 6)
By default ownership of #NFT = ownership of the token itself, NOT of the underlying work (or copyright/other IP rights in it)
That ownership remains with the original creator of the work
(3 of 6)
4️⃣ 🏀For eg look at terms of #NBA #TopShots
Grants LIMITED licence (not ownership)
* to use, copy and display moment
* for personal, non-commercial use only or as part of the #TopShot marketplace
vs. #cryptokitties licence - permits commercial use up to $100k per year
(4 of 6)
Grants LIMITED licence (not ownership)
* to use, copy and display moment
* for personal, non-commercial use only or as part of the #TopShot marketplace
vs. #cryptokitties licence - permits commercial use up to $100k per year
(4 of 6)
5️⃣✅ #NFTs have potential to solve this complexity
* clarify what rights are being transferred (if any)
* copyright ownership transfer executed via coded on-chain mechanisms
* monetisation via same on-chain mechanisms to ensure creators automatically benefit
(5 of 6)
* clarify what rights are being transferred (if any)
* copyright ownership transfer executed via coded on-chain mechanisms
* monetisation via same on-chain mechanisms to ensure creators automatically benefit
(5 of 6)
6️⃣⛑ AML/KYC and consumer protection laws DO apply to transactions in #NFTs
Hopefully this goes without saying but this means don’t
a) engage in deceptive trade practices
b) sell what you don’t own
c) use NFTs to launder money
(6 of 6)
Hopefully this goes without saying but this means don’t
a) engage in deceptive trade practices
b) sell what you don’t own
c) use NFTs to launder money
(6 of 6)
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