The “Non-Fungible Tokens” (NFT) are taking an increasingly growing role in the circulation of economic goods and services in general. In this context, from Untitled SLC, a legal services boutique specialized in international estate planning and the establishment of investment funds, they have shared with Cointelegraph en Español some points that should be considered relevant.
“NFTs came to the crypto world a couple of years ago thanks to the use of the same technology that allows the creation of cryptocurrencies. The value of virtual goods is estimated to exceed $1 billion in the United States alone, according to a report published last year, cited by the Financial Times. They also mentioned that collectors around the world are digitizing their items in order to store them more efficiently, but also tempted by the robustness of the blockchain to corroborate the authenticity and ownership of their collections.
According to what they cite, when one thinks of a person’s wealth or fortune, it is usual to relate it to cash, investments, properties, automobiles, jewelry, art, among others. However, they mention that for some time, a new type of asset began to take center stage, the so-called digital assets, within which NFTs are the most recent to be incorporated as an objective of people’s wealth planning.
Daniela Baldovino, who serves as Global Head Corporate & Funds of Untitled SLC, highlighted that these assets come with their own set of risks and specific considerations, in terms of their preservation, protection, transaction costs and possibility of legacy within, for For example, an inheritance.
“NFTs are different from generic or fungible tokens, which are interchangeable with each other without any distinctive feature or particularity in what they represent. Both, however, are types of crypto assets that will be stored in a wallet or virtual wallet, on which we must pay special attention when planning our assets given the great value that they can reach, “added Baldovino.
Legal aspects
For Baldovino, we will soon be able to see the application of NFTs to the ownership of even more valuable and complex assets. She believes that this will happen as long as its condition expands to be an instrument to guarantee the sole ownership of any asset. “The perspective is that they increasingly transcend the art market and even beyond it, enabling new business models for real estate, e-sports, investments, etc.”, he said.
He highlighted that in the year 2021 different novelties emerged that further popularized the existence of NFTs. “Lionel Messi presented his collection of NFTs called ‘Messiverse’, which represents digital works, and also Cristiano Ronaldo launched his own collection. There are already some musical bands that have released, or are about to release, their new works directly in NFT format and there are others that are offering themselves without intermediaries, through the use of blockchain technology”, he added.
Baldovino mentioned that before acquiring a NFT, the interested party must exhaustively analyze its content, basically to know if he is only acquiring the work or if it includes or does not include rights of exploitation.
“In the first case, the NFT will be an object to collect, while in the second case, it must be taken as an asset for economic exploitation,” he explained.
While NFTs are a tokenized digital representation of a real work, it must be taken into account that when a digital work is transmitted – Baldovino commented – the rights that the author has over the work are not necessarily transmitted, in the same way that whoever sells a painting does not transfer to the buyer the exploitation rights of the painting, unless, for example, a contract of assignment of rights has been made.
Likewise, he clarified that in these conditions it is important, then, to attribute to the token those rights of exploitation of the work that they want to transmit and the way to do it. You have to take into account “whether it is exclusive or not, even if it is valid for the whole world or only for some jurisdictions, for how long the rights and the costs or commissions for each transfer are transferred.”
Having said all of the above, for Untitled SLC it is always necessary to clarify that two main categories emerge from this topic: on the one hand, NFTs that have the status of utility token and serve to intervene in a platform to acquire goods and services on it , type airline miles. The other category is made up of NFTs that represent an existing asset, tangible or intangible, digital or material, be they shares, works of art, music, rights, a drawing, among others.
Customer Help Request
“There is also the case of clients who come to our study asking us for help because they aspire to issue NFTs as part of a specific project. In that case, we are going to have to define how we are going to structure the issuance of those tokens: who is going to be the initial owner of the project that is going to issue the tokens, how will the operation of their sale to third parties be, if that activity It will be regulated or not, that is, if it needs a license, or a permit from the regulatory body of each jurisdiction, which must surely be requested if the activity that this NFT involves is an investment”, commented Baldovino.
Finally, he pointed out that among the different options that are being considered for these cases, the key is to define, in addition, if the company that issues the tokens on the specific platform is going to be the same one that is in charge of selling them or if they are going to be transfer to another to take over this task.
“All this is because the regulations are changing or there are no regulations, so we do not know for sure the regulatory changes that countries can implement to allow all activity related to NFTs. At least at this stage, we recommend separating the activities involved: issuance, sale, holding of intellectual property rights, among others, in different structures to reduce the risks of the project”, concluded Baldovino.
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