As the world economy increasingly goes digital, innovators and existing market participants are finding new ways to tokenize assets and expand upon their uses, particularly with non-fungible tokens (NFTs). NFTs have commonly been used to represent digital art, photos, videos, audio files, collectibles, game items, tickets, and other digital assets, but can also represent virtually any digital or physical asset as well as entitlements (e.g., tickets, subscriptions, exclusive access, etc.).
Game companies, artists, and well-known brands are joining the NFT economy at an increasing rate and showing no signs of slowing down. Whether you are a game company contemplating tokenized virtual goods, an artist looking to tokenize digital art, or a brand owner looking to jump into digital fashion or other types of NFTs, there are potential legal issues of which you should be aware. Tokenization can implicate several U.S. laws, including those related to licensing, securities, anti-money laundering, sanctions, intellectual property, gambling, and others.
For more information on these issues to consider, see here.
Please feel free to contact us for more information or with any questions on these issues.
James Gatto, Yasamin Parsafar, Gabriel Khoury, and Pouneh Almasi.