Lawyer criticized the bill on NFT-Tokens in Russia

Lawyer criticized the bill on NFT-Tokens in Russia

The attempt to equate NFT to the protected results of intellectual activity and means of individualization makes it clear that lawmakers do not understand the nature of NFT, says partner, head of FinTech & Crypto practice of law firm DRC Mikhail Bystrov, writes RBC Crypto.

The lawyer commented on the bill, which was submitted to the State Duma on May 19. Deputies of the “New People” faction believe that the document will protect the rights of NFT owners, because now in the legal field in Russia this concept does not exist at all, and people continue to make transactions with non-interchangeable Tokens “at their own risk”.

NFT is proposed to be described as “a non-exchangeable Token of a unique digital asset (images, video or other digital content or asset) in the form of non-exchangeable data stored in a distributed registry system (Blockchain system). Such tokens are proposed to be regulated as intellectual property.

“By their nature, NFTs are a unique digital quasi-certificate confirming the fact of granting rights to an asset, not necessarily a digital one at all. However, lawmakers limit the scope of NFTs only to digital assets, although there is no definition of them anywhere in the current legislation, and in reality the potential scope of NFTs is far from limited to such assets”

bystrov emphasized

He added that NFT could be successfully used to confirm the ownership of any object of the real world, such as a car or apartment. However, the legislators do not think about it, because the Token is tied to a picture or a video, the expert said.

He says the authors of the bill don’t understand that by purchasing NFT, the users do not necessarily receive an exclusive right to the digital object, tied to the Token. In the vast majority of cases users are just acquiring a “digital wrapper” that gives them very limited rights to use the tied object, while the object itself can be stored anywhere – IPFS, a dedicated server, in the cloud.

The expert pointed out that in international experience there are already successful definitions of NFT. In particular, last year the SEC of Thailand defined NFT as “digitally issued Tokens to capture the ownership or granting of rights to an object or certain rights that are unique and can be issued on a Blockchain that cannot be exchanged for the same amount of the same category or type of cryptographic asset.”

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Written by Renat
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