The newest wave of crypto is the “non-fungible token,” meaning that one item can have a different value than another. The technology has been largely used in collectibles and digital art, but now regulators are beginning to legitimize these assets as property in their own rights. This could mean huge monetary gains for early adopters looking to invest further into this market.

The “nfts art” is a digital token that can be used to purchase anything. The tokens were ruled as legal property by the U.S. Securities and Exchange Commission in July 2018.

NFTs Ruled as Legal Property

In the United Kingdom, a High Court decision recognized NFTs as lawful property. The judgement also implies that people of England and Wales will be better protected if they are ever the victims of NFT fraud. 

Lavinia Osbourne, the creator of Women in Blockchain Talks, said in March that two digital works from the Boss Beauties NFT collection had been taken from her wallet. Following an investigation into the nature of the digital asset, the court determined that NFTs were ‘property,’ and so entitled to legal protection.

The protection on offer in this case was an order to freeze the assets served on Ozone Networks (which runs OpenSea), as well as a Bankers Trust disclosure requiring OpenSea to divulge information on the two account holders who have the stolen NFTs. In addition, the orders were granted authorization to be served regardless of jurisdiction, which is critical given the mostly unknown locations of Web3 actors and activities.

“It is of the highest importance because, for the first time in the world (as far as we are aware), a court of law has recognized that an NFT is property susceptible of being frozen by means of an injunction,” said Racheal Muldoon, a lawyer on the case. As a result of this decision, there is no longer any doubt that NFTs (as code-based tokens) constitute property in and of themselves, apart from the item they represent (e.g., a digital artwork), under English and Welsh law.”

Now that such a judgement has been made, the following steps in Osbourne’s NFT recovery have begun, including the barring of NFT sales on OpenSea’s platform and the employment of intelligence company Mitmark to gather evidence, identify current holders, and expedite the assets’ return.

 

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