Non-fungible Tokens (NFTs)

Non-fungible tokens (NFTs) are cryptographic tokens on a blockchain with a unique code and accompanying metadata on the blockchain.

What are the NTFs?

Non-fungible tokens (NFTs) are cryptographic tokens on a blockchain with a unique code and accompanying metadata on the blockchain.

NFTs constitute ownership of an underlying asset on the blockchain. The asset in question can take the form of digital paintings, music, videos, and even non-movable assets such as properties and rare collectibles.

What sets NFTs apart from other “fungible” assets such as precious metals, crypto coins and currency is that no 2 NTFs are alike. So, the value they represent is also not alike. They cannot be exchanged one-for-one, unlike crypto coins and currency. Hence the term “non-fungible” which means “non-changeable”.

NFTs present a novel platform for asset owners:

  • particularly artists
  • musicians
  • athletes
  • owners of coveted collectibles

to sell their work and associated assets.

  • NFTs generally are unregulated under prevailing Singapore law as they may not fall within the ambit of applicable securities law, financial advisory law or even the Payment Services Act 2019.
  • A recent Singapore High Court decision that NFTs are “private property” have helped to strengthen the legal rights and protection accorded to NFTs.
  • In May 2022, the Singapore High Court issued an injunction to prevent the sale of a coveted NFT from the Bored Ape Yacht Club series until the ownership dispute between the parties was resolved.
  • It is likely that NFTs will gain in prominence in the coming months as it is a novel way to sub-divide an asset.  Issuers of NFTs however are advised to seek the advice of lawyers to structure the NFT sale so as to not fall foul of legislation.
  • A potential risk is for the NFTs to be deemed a collective investment scheme that may require licensing.  It is thus best to work with experienced blockchain Attorneys in the structuring of the NFT.

Bespoke
legal solutions
for NFTs matters

Our network of NFT specialist lawyers with extensive experience in various NFT projects in the region can assist you with the successful launch of your NFT project. Our specialities include

  • 1

    Advising on appropriate company structure and Singapore company incorporation

  • 2

    Nominee director services in Singapore

  • 3
    Corporate bank account opening assistance
  • 4
    Legal opinions on NFTs
  • 5

    NFT token terms and conditions

  • 6

    Legal and Regulatory structuring of NFT projects

  • 7

    Compliance and Best practices framework advisory

  • 8

    Intellectual Property related issues

  • 9

    Trademark related advisory – domestic and regional

  • 10

    Business services agreements in relation to NFTs