At the beginning of May, the UK Web3 community celebrated an important case. The London High Court, closest to the US Supreme Court, ruled that non-fungible tokens (NFTs) represent “private property.” However, there are some caveats. In a court ruling, this status of private property does not apply to the actual underlying content represented by the NFT. Cointelegraph has contacted legal experts to understand what this decision could change in the UK legal situation.
Theft of boss beauty
In February 2022, Lavinia D. Osbourne, founder of Women at Blockchain Talks, said: I have written On Twitter, I found that two digital works were stolen from Boss Beauty. This is a 10,000 NFT collection of authorized women created by Generation Z Changemakers and featured on the New York Stock Exchange.
Tokens come with many utility points such as access to exclusive events, free books, license fees and much more. Osbourne claimed that the work stolen from the MetaMask wallet later appeared on the OpenSea market. She tracked NFTs with the help of security and intelligence company Mitmark.
The issue was brought to court in March, and on April 29, the Art Newspaper reported on the decision of the British High Court. In this ruling, the judge recognized the NFT as a legally protected property. In addition, the court issued an injunction to freeze the assets of Ozone Networks (OpenSea’s host) accounts, forcing OpenSea to disclose information about the two account owners who own the stolen NFTs. bottom.Shortly thereafter, OpenSea stopped selling these NFTs — Boss Beauty numbers. 680 When 691..
An injunction has been issued to the “unknown person” because the identity of the wallet holder remains unknown.In a comment on the decision, Stephenson LLP Called The freeze injunction is a “very strict (that is, old-fashioned, strict) remedy” that describes it as the “nuclear weapon” of the law.
Following a court order, Osborne won and declared:
“Women in Blockchain Talks were founded to open up opportunities for blockchain to offer to anyone, regardless of age, gender, nationality or background. This case makes the blockchain space safer and more We hope it helps to encourage many people to interact with exciting and meaningful assets like NFTs. “
Tokens and assets
Racheal Muldoon, the defense counsel for the case, Highlighting The “greatest importance” of the ruling “removes the uncertainty that under English and Welsh law, NFTs are their own property and different from what they represent,” she said. But it is exactly the details mentioned above that other experts have become skeptical of the groundbreaking importance of the court’s decision.
Although NFTs have already enjoyed the status of assets by the Internal Revenue Service, the declared differences between tokens and underlying assets rarely fill the current legislative gap between the UK and the US. “That is, if you have a token, you have a token, but you don’t necessarily have other rights,” said Juliet Moringiello, a professor of federal law at Widener University. I got it To Artnet News.
Emily Gould as Assistant Director of the Institute of Arts and Law Made to remember In her opinion piece on the case, the decisions of British courts, regulatory developments, and government studies over the past few years are becoming more and more harmonious in classifying crypto assets as property.She especially pointed out 2019 AA vs. unknown person And “Legal Statement on Cryptocurrency Assets and Smart Contracts” ReportPresented by the UK Task Force of the LawTech Delivery Panel in the same year.
“The underlying assets or assets that NFTs represent, such as artwork and other copyrighted materials, comply with the same copyright laws in the United Kingdom as in the United States,” said the UK-based CEO and co-worker. Founder Tom Graham said. Web3 company Metaphysic.ai explained to Cointelegraph. “This decision does not help clarify the distinction.”
But for Graham, the court still set an “interesting precedent” as the court issued an injunction to OpenSea. This is important in that the court intervenes and provides injunctive relief in the event that the NFT is stolen. He added:
“It’s clear that NFTs now comply with the same UK property law that governs all other assets. It’s investing in NFTs that the court system protects their property rights, at least in the UK. It will be a great precedent for those who do. “
Talking to Cointelegraph, Anna Trinh, chief compliance officer at digital financial firm Aquanow, said the ruling wasn’t revolutionary, but it wasn’t without “business importance.” Establishing a legal precedent that confirms what is already most believed to be true may be more comfortable by requiring the NFT platform to freeze the accounts of malicious actors. Trin said:
“I don’t think it’s so surprising that NFTs are perceived as private or personal property. You can buy, sell, or trade NFTs. This is basically NFT’s first. It shows that it is a private property in principle. It would have been more shocking if the court determined that the NFT was not private property. “
Trinh does not believe there is a problem with the existing legal protection of the underlying asset. Since these are based on the contract contents at the time of purchase, the contract law and intellectual property law are applied depending on the nature of the asset. In Trinh’s view, there are more urgent legal issues that regulators can pay attention to, such as the rights of the creator.