What's faster, a regulator coming up with rules for crypto or a developer coding the next new thing? While they are doing their best, lawmakers seem to have trouble keeping up with blockchain technology. (Via CointelegraphZN)
When hundreds of millions of dollars are being raised in an entirely new way, it’s not surprising that potential legal concerns are lurking around the corner. This was certainly the case with ICOs, which regularly ran afoul of securities laws and the related accredited investor laws, says Randall Johnson, a United States lawyer with 30 years of experience specializing in securities regulations and who advises various blockchain projects.
But how is the financial regulation of cryptocurrencies related to the metaverse and NFTs? It’s because NFTs are tokens just the same, and serious questions could arise regarding their status as securities. A non-fractionalized real estate NFT seems to steer clear of securities regulations. Source: LiquidEarth, agrees that while most NFTs do not resemble securities, others are likely to get caught in regulator’s nets.
Suppose an artist creates an NFT series titled “An Artist’s Share” whose 100 unique works are then included in smart contracts designed to automatically pay the owner of each “Artist’s Share” a 0.1% payout of the given artist’s gross revenue from minting and royalties. Would this be a mere NFT, or would it be a security? According to Johnson’s definition, it would seem to fit the bill.
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