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The lawyer is sure that lawmakers do not understand the subject of non-fungible tokens
An attempt to equate NFT with protected results of intellectual activity and means of individualization makes it clear that lawmakers do not understand the nature of NFT, says Mikhail Bystrov, partner, head of the FinTech & Crypto practice at the law firm DRC.
The lawyer commented on the bill, which was submitted to the State Duma on May 19. Deputies of the faction “New People” believe that the document will protect the rights of NFT owners, since now in the legal field in Russia this concept does not exist at all, and people continue to make transactions with non-fungible tokens “at their own risk”.
The NFT is proposed to be described as “a non-interchangeable token of a unique digital asset (images, videos or other digital content or asset) in the form of non-interchangeable data stored in a distributed registry system (blockchain system).” Such tokens are proposed to be regulated as intellectual property.
“By their very nature, FTFs are unique digital quasi-evidence that rights have been granted to an asset, and not necessarily a digital one. However, lawmakers limit the scope of application of the NFT only to digital assets, although their definition is nowhere in the current legislation, and in reality the potential scope of the NFT is far from being limited to such, “Bystrov emphasized.
He added that NFT could be successfully used to prove ownership of a real-world object, such as a car or apartment. However, legislators do not think about it, since the token itself for them is equal to an attached picture or video, the expert believes.
According to him, the authors of the bill do not understand that by acquiring NFT, users do not necessarily receive the exclusive right to a digital object tied to the token. In the vast majority of cases, users only purchase a “digital wrapper” that provides them with extremely limited rights to use the tethered object, and the object itself can be stored in principle anywhere – IPFS, a dedicated server, in the cloud.
The expert pointed out that in international experience there are already successful definitions of NFT. Specifically, last year the Sec of Thailand defined NFT as “tokens issued in digital form to fix ownership or grant rights to an object or certain rights that are unique and can be issued on the blockchain that cannot be exchanged for the same amount of the same category or type of cryptographic asset.”
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