SNEAK PEEK
- The language of legislation amounts to the European Union’s labeling major blue-chip NFT projects such as CryptoPunks, BAYC, Doodles and more.
- Every NFT is only a fungible share in the value of the whole project.
- Owners of Bored Ape NFTs own a share in the collective value of Bored Ape and Yuga Labs and same is with other projects.
The European Union’s landmark and Markets in Crypto Assets draft legislation clears that non-fungible tokens that are sold like elements of large collections have low or almost no rare qualities or utility. As a result, they are subject to the regulatory survey similar to cryptocurrencies.
The MiCA draft is probably the legislation’s final version and hashed out after the negotiation between the European Commission, the European Parliament and the European Council.
The legislation deals with the regulation of cryptocurrency activity in Europe and excludes from its scope rare and not fungible digital assets which include collectibles and digital art that have exclusive characteristics and offer utility to the owner of the token.
The bill clears that the issuance of crypto-assets in the form of non-fungible tokens in a collection or large series have to be taken as an indicator of their fungibility.
According to the legislation, the only attribution of a rare identifier is not enough to categorize it as exclusive or not fungible.
For a crypto asset to be taken as rare and not fungible, it is important for the assets or rights to be unique as well as not fungible.
Brian Fyre, who holds specialization in NFTs and securities law, shared that the language is a direct shot at popular collections such as BAYC, which has 10,000 similar NFTs and are differentiated through numbering mechanisms that assign 100% IP rights to owners of NFTs.
MiCA’s language as interpreted by Fyre clears that every owner of the Bored Ape NFT does not own a rare art piece but owns a share in the Bored Ape brand’s collective value as well as Yuga Labs.
When it comes to what elements of the crypto industry need to be taken as securities by government regulators, the topic has always been an issue. This week, the Securities and Exchange Commission implied that the whole Ethereum network must be viewed as a securities exchange.
Fyre believes that the effect on American regulators can’t be ignored if the European Union classified blue-chip NFT collections as securities. Previously, Today NFT News reported that EU plans to impose regulations and infrastructure taxes on the metaverse.
