Thread by @LawxTechxArt

1/ quick 🪡 to recap my #NFTNYC2022 talk, Virtually Compliant: Emerging Legal Issues with NFTs.

shoutout to @JoshKershner for the photo.

not legal advice!

2/ there's plenty of great coverage on the critical NFT issues related to securities laws and intellectual property. so i wanted to shed light on oft overlooked matters that can still pose material risk. here's three things to watch out for so you can go from this...

3/ to this

4/ first up: privacy. would a user expect that an interaction on tiktok could be correlated - by anyone - to their interactions not only on instagram, snapchat, and other forms of social media, but also with their personal financial accounts and where they shop?

5/ without privacy preserving mechanisms or practices in place, this can happen with cryptocurrencies and NFTs, particularly as they become more social and interactive. so what's the solution? how do you set appropriate privacy expectations and educate users?

6/ leverage clear and concise FAQ. consider building messaging into user flows where possible. @Twitter does a good job of this in their NFT PFP flow (h/t @jkrosnicki for spotting this).

7/ second issue: lotteries. every U.S. state has some form of anti-lottery laws. generally, a lottery is comprised of a prize, element of chance in determining the winner, and consideration. solution?

8/ see if you can shift the design of your product to knock out one or more of those elements. perhaps it's an airdrop instead of a paid mint. you can look to some of the trading card cases where the court determined there was no lottery present and draw analogies.

9/ third issue: promotions. a bit of a classic if you've been in crypto for a while, but i think it merits resurfacing. not all celebs or influencers are aware of the extent to which the SEC looks at social media to determine whether an asset is promoted as an investment opp.

10/ for example, even the use of 🚀 was called out by the SEC in its complaint against LBRY last year (h/t @jnnylng for identifying this) sec.gov/litigation/lit…

11/ solution? add 1 page addendum to your influencer agreement of do’s and don’ts. flag that it’s not legal advice and the influencer is still liable. treat it just like you do your other brand guidelines.

12/ what do you think? what bullets have you helped your clients dodge when advising on NFTs?

after the holiday, i'll post notes on the second part of my talk, trends to watch. stay tuned!