The Regulation of NFTs: Much Ado About Nothing?

The year 2021 was marked by the rise of NFTs (non-fungible tokens). The widespread use and sales volume of NFTs have created a wide range of legal problems regarding contract, property, capital markets, intellectual property, consumer law, and criminal and tax laws. The first step toward resolving these legal problems would be to define crypto assets and determine how they relate to NFTs. Even though most governments in the world have opted for the regulation of crypto assets, or at least are preparing to do so, NFTs fall into a grey regulatory zone. This is true for both civil law countries and common law countries. For instance, most NFT marketplaces in the world do not apply ‘know your customer’ (KYC) and anti-money laundering (AML) requirements. The taxation of NFTs is highly debated. It can even be concluded that most countries are somehow reluctant to regulate NFTs and NFT marketplaces. To understand the legal regime that will be applied to NFTs, currently, the definition of the term ‘crypto asset’ or ‘virtual asset’ is observed. Is the regulation of crypto assets fit for the unique characteristics of NFTs? Should legal systems develop a specific and unique understanding of NFTs? Or has that time not come yet? Regulation, Web 3.0, NFT, Crypto assets, Digital assets, Blockchain