How does European regulation work?

The NFT market has seen growth in the industry From just $41 million in 2018 to $2.5 billion in the first half of 2021, reaching nearly 60 times as much in three and a half years. While the analyzes of the US investment bank Jefferies speak of 35 billion in 2022 and at least 80 billion in 2025. The bursting of the bubble has led, so far, to awareness of the actual opportunities of this tool even outside its own niche. . In the art world, in particular, the blockchain technology behind non-fungible tokens (NFT) has proven to be The answer to two different needs. On the one hand, I Museums have managed to refinance themselves After the pandemic shutdown, by digitizing the museum experience and turning one’s work into NFT, reselling it at auction and ensuring a certificate of authenticity and exclusivity. On the other hand, it was possible Transcend the old problem of copyright fraudgiving life to an assembly development that – the numbers speak for themselves – has received an excellent response from the market, despite the fact that it is an intangible business.

In fact, NFTs are nothing more than Certificates of Authenticity evidencing correspondence between the author of the work and the owner and/or retailer. The skepticism that initially prevented the belief that this medium could really represent a viable alternative to the physical market, has now been replaced by the fact that the need on the part of investors for a safe and indisputable paternity certificate. It was much stronger.
Moreover, NFT certification also provides a solution to problems that have plagued entire generations of artists, starting with the collection of royalties, as well as giving investors and collectors the advantage of allowing real-time evaluation and exchange.

In Italy, the issue that has certainly aroused interest is one Shitties of the brightest art in the world
: A group of NFTs launched by an unknown artist who identifies himself under the pseudonym Shitoshi Nakamoto. Based on Piero Manzoni’s 1961 “Artist’s Nonsense”, which made a huge impact on the entire art market with its provocative and revolutionary idea, Chitoshi and his team decided to collect the poo of celebrities from all over the world. They collected more than 1,500 human faeces from around the world in a span of two years, packaged them in state-of-the-art packaging and digitized them into a set of 100 NFTs: Bullshit
. From the start, the group has attracted the interest of the NFT community: Over 45 coins were sold in one month totaling about 80 Ethereum, worth over €232,000.. One of these, Shit #087 – Bill Gates, was sold at the conference, valued at $7,500, with more than 20 bidders. In case Bullshit
NFT holders not only own artwork that is unique in the world, but can also earn revenue from transaction fees on exchanges, participate in the forefront of subsequent releases of the artist and actively participate in the development of the project.

Definitely The more the market expands, the greater the need for a legal economic system that reflects the directives to harmonize free trade in Europe, and the protections associated with it, which is essential.. From this point of view, the first critical importance was represented by the search for a comprehensive legal definition of a protected asset, the NFT as an asset. This definition – between financial origin and intellectual work – must necessarily develop with the development of the phenomenon, moving on several levels, observing the principle of technological neutrality. In the September 2020So, we come to one A proposal to organize the European Parliament and the European Council, known in the environment by the abbreviation MiCA or MiCAR (Market in Crypto Asset Regulation), specifically aimed at regulating the crypto asset market and modifying Dir. (European Union) 2019/1937. A regulatory body of 126 articles, in which NFTs are never explicitly mentioned. In this regard, it will be necessary to wait for the application stage to determine whether or not this type of asset can fall within future European regulations.

In fact, the sole purpose of this legislation is to represent the system of authorization, regulation and supervision that market players will have to refer to within the Federation in the coming years. This does not constitute a prior limitation, but on the contrary may mean the opportunity to take advantage of the benefits, which are associated with unique licenses, in the same way that occurs at the financial and tax level. There are still two aspects to be examined: the applicability of anti-money laundering regulations to NFTs as a financial instrument, and copyright protection as a work of thought.
Regarding the first point, the discipline referred to in Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on Markets in Financial Instruments (CD. MiFID II) in Framing NFTs as financial instruments. In this regard, it is necessary to start from the assumption that, outside the category of instruments strictly included in the List, the relevant legislation is not directly applicable. Moreover, the characteristics of the NFT as a tool for certifying a work of art do not comply with the above-mentioned legislation, where the characteristics of interchangeability or repeatability of a financial instrument are mentioned.
But regarding the second point, the debate is open. In this sense, the copyright (according to Law No. 633/1941 and subsequent amendments) is called into question, as well as the nature of the discussed relationship between the author of the work – the owner of the rights – and the users of the work itself. . The begging is whether this owner-user relationship can be managed through specific contracts such as licenses for use, in common use, and if so, how this fits with the nature of NFTs and the ways in which they are exchanged, for example through smart contracts.

Although no conclusion has been reached on the matter, it seems completely It is reasonable to include NFTs among intellectual works that may be protected by copyrightAnd, as we’ve seen, in most cases – although there is no physical requirement – the minimum requirement for originality and creativity is sure to be recognizable, especially in regards to the new artistic team of digital artists that are propagating by feeding the market and making them acquire your personality.
Consequently, and based on today’s findings, it seems reasonable to believe that smart contracts, as tools for exchanging NFTs, can – and should – combine licenses for the economic exploitation of work by the rights holder, in such a way as to allow also in this particular context, the management of relationships with users . This can and must necessarily be done with Supporting the blockchain as the only technology capable of allowing, among other things, the authentication of the history of NFT transfers between users Moreover, to always ensure knowledge and knowledge of the authorship of the work.

* CEO of Helon and co-founder of Blockchain Army

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