Knowing the movement of this industry and determining the legal regime that is applicable to it, is becoming a strategic move for legal firms, to be able to encourage the actors to develop their projects with legal support, both from internal and external regulations. as it is clear that the exchange of NFTs usually derives in multiple jurisdictions.
In what corresponds to Colombia and/or Latin America, to date there is no single legal definition for NFTs, nor is there a harmonized regulatory regime that determines the parameters for their issuance, exchange, custody, conditions of access to prerogatives or authentication conditions of that underlying asset, etc. Therefore, it is necessary to correctly identify the relevant legal challenges in order to find the best solutions to address them, for example:
From the intellectual property
When the NFT is sold, it must be clear what rights the owner of the NFT has? Or is there a written assignment specifying the true rights that have been assigned?
Answering these questions ensures that the person acquiring them obtains the necessary intellectual property rights.
From the Financial
If an NFT is considered as a Token, in light of the definition of cryptoassets or crypto-assets, they could also be considered as a financial or tangible asset that is represented through an encoding process in a decentralized database, which which would imply that from this position a legal evaluation is carried out to determine if the characteristics of the NFT involved in the project can qualify: as a token and/or digital asset that can give rise to a financial instrument.
Having these clear parameters allows us to separate, for example, NFTs that are used only as a “virtual product” (for example, in a video game), which may not have any investment purpose, from a very different one, which classify as crypto assets, units of account or securities/investment assets.
From the Tax
While the tax treatment of non-fungible tokens NFTs (unique digital assets using blockchain) may be similar to that of cryptocurrencies, the NFT is
It would be considered as one more asset where the particular buyer must declare them according to their sale or exchange.
Therefore, in conclusion, depending on how NFT projects are structured and documented, a precise evaluation may be necessary to clarify which regime is applicable to them, since it has been notorious that the more dominant the speculative component is for their issuance and their trading, the more It is likely that an NFT will continue to be considered a crypto asset and therefore a financial instrument.
The truth is that for the time being, outside of the financial view, in most cases, an NFT will be governed by the same laws applicable to its underlying asset.
Disclaimer: The information and/or opinions expressed in this article are the sole responsibility of Diego Beltrán Avila and do not necessarily represent the points of view or the editorial line of Cointelegraph. The information set forth herein should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
Diego Beltran Avila He is an advisory lawyer in Information Technology, enthusiast of Blockchain Technology. He is the managing partner of the Colombian law firm GroupLegalTic. He is a participant and academic researcher of technology and fields of use, updating and participating as a speaker in different scenarios.
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