NFT Legal Issues

As crypto continues to grow and take new forms, complications can arise that require legal assistance. One of these forms is called an NFT (non-fungible token). An NFT is a unit of data with its own unique number that is placed on a blockchain to verify ownership of some object. The data are necessary to do three important things.

  • Verify ownership
  • Proof of transaction on the block chain
  • Proves authenticity of an object which is crucial to its value

Verifying ownership is important for multiple reasons. A primary reason deals with copyright infringement laws. The creator of a particular asset has ALL rights reserved to themself for their creation as long as they do not sell their creation to another person. However, if a lawful transaction takes place, under the First Sale Doctrine, the creator cannot stop the person they sold the object to from selling it, destroying it, etc. The NFT comes into play because it shows this transaction has taken place and displays who the new owner is. However, if issues arise during the transaction a crypto lawyer like those at Davis Law Firm is necessary to solve this problem.

Another reason verifying ownership is important is because people can commit fraud by posing as sellers or buyers when they are not. An NFT is a way to stop criminals from harming consumers. However, it can still get complicated when it comes to attaining authentic digital art and digital assets in general. There are many fraudsters out there and it can be hard to know if they are who they claim to be. One way to be certain you are in an authentic deal is to see on the blockchain different transactions that are linked to the seller/brand you want to attain an asset from. The unique number that is seen on the blockchain cannot be forged because no number can repeat itself on that chain.

The NFT for a digital asset is the sole reason why it has any value. Anyone can screen record or copy a video, but if it does not have an NFT to verify it is the original copy, it is worthless. Brands like the NBA capitalize on this by selling different clips and moments from their games as certified NFTs. With the brand accompanying the clip, which is allowed by the NFT, the NBA can share these moments as digital collectibles, almost like trading baseball cards., and they can become valuable assets.

As with all valuable asset classes, some people will try to take advantage of the situation. Scammers will try to impersonate brands like the NBA or create counterfeit brands to make their “digital assets” seem like they have value. Impersonation in this case is illegal and would create a situation requiring a cryptocurrency lawyer. If a situation like one described above happens to you, consulting one of our lawyers is a great first step to recovering your assets.

The Davis Law Firm is located in Jacksonville, Florida and serves clients throughout the states of Florida and Georgia, including Jacksonville, Miami, Pensacola, Orlando, Tampa, St. Petersburg, St. Augustine, Fort Myers, Daytona Beach, Panama City, Destin, Melbourne, Fort Lauderdale, West Palm Beach, Tallahassee, the Florida Keys, and everywhere in between.

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