LIJDLR

LEGAL ISSUES AROUND NFTs & THEIR WAYS OUT

Karandeep Singh, Law Student at Maharishi Markandeshwar University, Mullana

ABSTRACT

With the fastest growing demand for Bitcoin currency, the concept of NFT is essentially a new one. It is, however, a lesser-known issue, despite the fact that it has shown to be incredibly profitable. By allowing users to construct and build new kinds of ownership, NFT enables new markets to emerge. Non-fungible tokens are being purchased for tens of thousands or even millions of dollars. The NFT market saw trading volume of $25 billion in only 2021. Large quantities of money are frequently accompanied by fraud and scams. Digital assets’ rising prominence has given rise to a number of legal issues. The lack of a developed NFT regulatory framework is the fundamental issue. There is still disagreement about how to handle NFTs,which makes it difficult to set clear regulatory norms.

NFTs can now be seen in one of three ways: as goods, securities, or intellectual property. Each view is covered in further detail throughout the article. These digital assets were not intended to be supported by NFT standards or the legal system. However, even as NFT investors, buyers, and sellers investigate this area, new NFT legal difficulties keep cropping up. Still, it is appropriate to say that the NFT market is still developing, and it will take time for a proper NFT legal framework to be established. That said, governments around the world have already taken their first steps towards the creation of NFT rules and standards, demonstrating that they are paying serious attention to these digital assets.  The article discusses the legal problems like Lack of Data protection regulations, Lack of intellectual property rights in NFTs, the concept of NFT faces and their possible way outs.