Abstract

As novel digital assets built on blockchain technology with a wide range of applications in the arts, entertainment, fashion and marketing for companies, brand owners and individuals, Non-Fungible Tokens (hereinafter ‘NFTs’) can be anything such as videos, images, audio, documents and even video games. When new disruptive technologies emerge and shake existing rules, regulators must identify inherent risks and develop policy strategies to balance the various interests that innovation touches upon. As the technology matures and its adoption spreads, some of the legal challenges faced by NFTs, as an emerging crypto token, are highlighted in this text as well as the author’s opinion on how to resolve them from a regulatory standpoint. Both the academic literature and several court cases have already tackled the underlying difficulties of regulating blockchain and the particulars of NFTs. Despite NFTs offering a very profitable new market for artists and creators, there are perils and concerns regarding, namely, intellectual property protections, personal property considerations and money laundering vulnerabilities which must be addressed by the legal rules governing blockchain. This paper endeavours to provide an analysis of this triad of problems at a time where there is no comprehensive legal act, in a European and international context, properly addressing what the technology behind NFTs is doing. As such, it intends to contribute to the global issue of defining the right legal rules to properly address them within the digital asset ecosystem of NFTs. Blockchain, Crypto Assets, Digital Assets, Cryptocurrency, Distributed Ledger Technology, DLT, Metaverse, Tokens, Utility tokens, Non-Fungible Tokens, NFTs, Tokenized art, Smart Contracts, Blockchain regulation, NFT regulation, Copyright, Intellectual Property, Trademark, Anti-money laundering, Terrorist financing, AML-CFT, Fifth AMLCFT Directive, GAFI, MiCA

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