CHAPTER 9Legal Aspects of NFTs
Now that you’re creating, selling, and buying non‐fungible tokens (NFTs), it’s essential to know how NFTs may be affected from a legal perspective. With any new use of technology, it usually takes a while for regulatory agencies, legislatures, and the courts to catch up to the technology’s rapid adoption. In the meantime, we can extrapolate how the law will be applied based upon how similar technologies, and aspects of the new technology, pertain to settled legal doctrine. No specific legal doctrine has yet been set for NFTs, but we can deduce how the law may be applied by looking more generally at how the law is applied to cryptocurrencies, art, and collectibles.
Are NFTs Securities?
Back in the ICO (Initial Coin Offering) heyday in 2017, new coins were popping up all over the place. Although some of these coins were founded on solid technology that provided real solutions, many were based on hype and hope, while others were just out‐and‐out scams. Some speculators looked for a quick 2x return, while others would hodl (crypto for “hold”), hoping the coin would go to the moon. And the scam coins were effectively nothing more than pump‐and‐dump schemes perpetrated by the coin’s founders. Too many investors filing complaints raised the ire of the U.S. Securities and ...
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