The cryptocurrency industry has a lot of moving parts and non-fungible tokens (NFT) are one area that is rapidly expanding. While an NFT is not a type of cryptocurrency, the NFT tokens are often purchased using crypto.
The significance of this is that NFTs have gone mainstream, and many major companies are using them for digital collectibles such as artwork. In 2021, Christie’s auction house set a precedent when it sold an NFT work of art by the digital artist Beeple. The art was sold for $69.3 million and was the first ever of its kind.
In one fail swoop, Christie’s ushered in a new era of digital content within the cryptocurrency arena. In one groundbreaking sale, it opened the door for artists, influencers, musicians, and other content creators to make a name for themselves in a very new arena. Investors and collectors are willing to spend and spend well to get NFT versions of assets like music or digital images. It presents a very good way for them to diversify their crypto holdings and take a deeper dip into the rising crypto waters.
NFTs vs. Cryptocurrency
Many people use cryptocurrency to purchase NFTs, but the two are not the same. However, they do run in the same neighborhood and are part of a brave new world that is emerging in a completely digital landscape. Understanding what NFTs and Cryptocurrencies are helps to better understand the differences between them and how they fit in the emerging digital landscape.
NFT – An NFT is a non-fungible token, meaning that it cannot be exchanged or replaced with another one that holds the same value and is identical. They are stored on a blockchain. Each NFT is unique, making them non-interchangeable. They are used to buy and sell digital assets, usually artwork, which might include images, digital art, tweets, virtual real estate, virtual trading cards, GIFs, video game skins, and more. Many of these tokens can go for hundreds of thousands or even millions of dollars.
The NFT turns an asset that would normally be easily available with no limits on the quantity and creates scarcity so that its worth is increased. The majority of these high-dollar NFTs come with a certificate of authenticity. This increases and justifies the value of the asset.
Cryptocurrency – Cryptocurrencies are a digital type of currency. They are fungible, meaning that they can be exchanged or traded for one another. They are not unique and those that are of the same value are identical, similar to our monetary currency, like the dollar bill. They can be used for investing, trading, and purchasing goods and services, including NFTs, depending on the type used. In fact, many NFTs are purchased using crypto.
Unlike our monetary system, cryptocurrency is not backed by any central government or authority. They are stored on a blockchain which is a type of digital ledger that records encrypted information such as ownership and transaction details. The owner of the crypto has a digital “key” that confirms they are the owner of the currency. There are many cryptocurrencies (17,000 and counting), the most popular of which include Bitcoin, Tether, Ethereum, and Binance Coin.
Both NFTs and crypto are largely unregulated because they are still considered new technology. State and federal lawmakers are working to create more regulations and laws to protect consumers and prevent fraud, but it takes time. As these new laws emerge, investors, collectors, and those who use crypto as a currency are required to comply with them. The landscape is rapidly changing and to protect your interests, your investments, your business, and your money, you need a solid, strong legal team that can navigate the complex NFT and cryptocurrency system so that you stay in compliance.
Is there such a thing as a crypto lawyer?
There are crypto lawyers, meaning lawyers who specialize in blockchain products including cryptocurrencies, NFTs, and other digital assets. These attorneys have both legal experience and education as well as knowledge and experience in the technical and legal aspects of decentralized finance. A good crypto lawyer should be able to support anyone in the blockchain arena, including investors, innovators, and issuers.
It is a fast-changing world, and they need to be able to keep up. This means having the latest information on regulations and laws, both federal and state, and being able to keep their clients up to-date and in compliance.
This is a highly specialized field that is very new, so not every attorney is going to have the training, skill, and knowledge to effectively serve these clients. If you have a crypto business, trade crypto, do any kind of work, or make transactions involving NFTs and/or crypto, you need a crypto lawyer. You really can’t afford to not have one.
What does an NFT lawyer do?
Digital art and blockchain are still very new fields and the laws are evolving at an incredible pace. They involve so many different issues, but intellectual property rights are usually at the forefront of NFT law.
NFT traders and creators may not know exactly how to protect their rights, but a law firm specializing in NFT can do that and more. Some of the main areas where they may help include:
- Providing guidance on IP protection and licensing strategies.
- Represent NFT creators who are dealing with intellectual property issues such as their work being shared or copied without their permission.
- Aiding NFT creators in obtaining copyrights or trademarks for their creations.
- Advise NFT buyers of the intellectual property rights they have for an asset they purchased. This can include selling copies or creating products that display the image and whether they need to get copyright permission from the creator.
- Provide guidance to NFT creators on IP issues that can include whether certain images or ideas can be used to create the NFT or if they need to obtain permission.
An NFT attorney can also help with many of the daily legal issues of business-like transactional negotiations, portfolio management, business litigation, contractual services, and protecting trade secrets.
What does a crypto lawyer do?
A crypto lawyer may also work with NFT clients. Some of the services may overlap, but crypto has some different legal requirements. Blockchain and cryptocurrency attorneys advise asset managers, issuers, family offices, investors, exchanges, innovators, and promoters on a wide variety of legal areas, including:
- Securities law
- Regulatory advice
- Compliance
- Cyber security
- Tax law
- Corporate law
- Dispute resolution
- Estate planning
- US SEC Howey test interpretation
- Data privacy
- Charitable giving matters
- Guidance on applicable state and federal laws
Everyone working in cryptocurrencies or crypto businesses can benefit from good legal counsel. It doesn’t matter if you are new to the field or if you have been an investor for years. There’s so much to keep up with regarding regulations and requirements. A good crypto lawyer can help.
They may also provide the same services to their crypto clients that they do to NFT clients. And with such a quickly growing industry, those services are very needed.
Intellectual Property Law
Intellectual property is anything that is the product of a mental or creative process and as a result, a new work, method, or novel invention is produced. There are four legal instruments that are protected via intellectual property: copyrights, patents, trade secrets, and trademarks.
Intellectual property is like any other type of property in terms of rights. The holder of the property has the exclusive right to use or exploit the property for their benefit or economic gain.
NFT law deals a lot with intellectual property. NFTs involve digital creators so it is very important that they get solid legal advice. When a token is created there are certain laws that buyer and seller must adhere to. Unfortunately, it is fairly easy to gain access to NFT assets and steal them. An NFT lawyer assesses the situation and helps the creator or owner find suitable ideas for carrying, keeping, and transferring the assets.
Copyright, Patent and Trademark Law
Copyrights, patents, and trademarks are how a creator’s original work is protected from being duplicated or used without their authorization. This is particularly applicable to NFT creators. Each of these is a type of intellectual property.
Copyright – Protects original works of authorship. It begins the moment the author creates the work in a tangible expression, such as an article or book.
Patent – Provides exclusive rights for an invention that can include forbidding others from selling, using, or making an invention for a certain amount of time.
Trademark – Provides ownership rights to a brand or company logo. The trademark can be a recognizable symbol, word, phrase, or insignia. It is assigned to just one specific product and is legally differentiated from all products that are the same type or kind.
All of these types of intellectual property are beneficial to crypto owners, traders, and businesses as well as the NFT creator.
Do I need a lawyer for my cryptocurrency or NFT business?
If you are operating a cryptocurrency or NFT business of any type, whether it’s a large corporation or you are a freelance designer, you need the protection that an attorney can offer. And you don’t have to own a large company to need legal representation. Freelance artists and NFT creators as well as micro-businesses and startups need a lawyer just as much.
The world of crypto and NFTs is changing so much and so quickly, that it is nearly impossible for a business owner to keep up with it on their own while building, operating, and growing their business. There are just too many things that can go wrong if the business owner is not absolutely on top of every aspect of their organization and the regulations and laws that govern it.
It’s a daunting task.
But that’s what NFT and crypto attorneys are there for – to keep you out of hot legal waters.
Experienced, Knowledgeable Crypto Attorney in New York
Crypto is an emerging and quickly evolving field. If you have a business in this area because you create NFTs, do trading, buying, or selling of digital assets, or do anything that involves digital assets, you need a crypto law firm with a legal team that not only has experience in the courtroom but knows the laws surrounding cryptocurrency and NFTs – and they will keep up with new laws and regulations as they come in affect.
You need The Litvak Law Firm. Mr. Litvak and his team have the experience and knowledge to help protect your rights and your business in all areas of crypto, NFTs, and blockchain. Whether it’s providing guidance on regulatory compliance or litigation for an intellectual property violation, they are professional, educated, and experienced in cryptocurrency and NFT law.
Call today at 718-989-2908 and schedule a consultation to find out how The Litvak Law Firm can help you protect your digital assets, your business, and your rights.