Digital & Technology
During the last months, digital assets called “Non-fungible Tokens” (widely known as “NFTs”) have gained a significant public attention and are currently one of the hottest topics amongst tech enthusiasts; tech legal advisors and tech companies. There is no doubt that NFTs create huge opportunities and can revolutionise whole industries such as the industry of entertainment; media; art and sports. At the same time, NFTs can (and have at a large extend already done) create new markets and opportunities for artists, musicians, brands, innovators, investors and consumers. As with other digital assets however, a wide range of legal issues/challenges can come into play depending on the structure of the asset and intent of the parties involved. Given that NFTs now lay the foundations for a new class of assets and ownership rights, a careful and thorough analysis of the underlying legal issues is needed both from those that issue and trade/sell the tokens as well as from those who will buy and acquire them.
Over the last few weeks, our firm has received a number of requests from a diverse group of clients across Europe who would like to enter into the NFTs industry and take advantage of the new opportunities. The speed, volume, and diversity of NFT-related questions speaks to the scope of the matter and widespread uncertainty regarding the legal status of NFTs. In light of the above, and while the excitement relating to NFTs is growing exponentially and on a global level, in this joined publication with our affiliated tech partner – Panobly – we provide an overview of what are NFTs; what is the technology behind them; what are the opportunities and legal challenges in relation to NFTs; whether there is any relevant EU legislation as well as what is the current position in Cyprus.