What does UK Court’s ruling to term NFTs as private property mean?

Ever since UK Chancellor Rishi Sunak announced that he would make the UK the next crypto hub by minting nonfungible tokens (NFTs), all eyes are on the regulators and Treasury to see their plan. With Royal Mint being tasked to create NFTs, many within the UK crypto circles have been asking a crucial question – will the UK change its stance on cryptos?

In a landmark judgment on 4 May, the High Court of Justice in London termed nonfungible tokens (NFT) represent “private property” thereby making it easier for anyone to contest it in the future. While the High Court called it “private property”, it did clarify that the rule doesn’t extend to the actual underlying content that NFT represents.

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The background

The case of NFTs was brought to the UK High Court following Lavinia D. Osbourne, founder of Women in Blockchain Talks, claimed that two of her digital works were stolen from her Metamask wallet earlier this year.

Osbourne claimed that it is a collection of 10,000-NFTs that showcased women empowerment and was created by Gen Z. The tokens suddenly ended up in two anonymous accounts in the NFT marketplace OpenSea.

Osbourne said that with the help of security and intelligence firm Mitmark, she was able to trace down the stolen NFT and file a petition in the court on 29 April. The judge overseeing the case then ruled that NFTs were private property. The court compelled OpenSea to freeze the accounts and disclose information about the two account holders in possession of the stolen NFTs.

‘Draconian remedy’

The decision hasn’t gone down well with some of the lawmakers. According to the Stevenson Law firm, the freezing injunction was equivalent to a draconian remedy to the whole issue.

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Racheal Muldoon, a counsel in the case, said that it was a breakthrough moment in the history of NFTs. The verdict showcases that for the first time, a court of law has recognised that an NFT is a property, she added.

This ruling certainly gives a clearer picture of what NFTs stands for in UK and with it now getting a private property status, it can be contested in the England and Wales region.

Tom Graham, CEO and co-founder of Web3 company Metaphysic.ai, said that the verdict has added more ambiguity around the concept of NFTs. But at the same time, he agreed that it does set a significant precedent going forward for people investing in NFTs. The court will be there to bail them out in case of any wrongdoings or scams if they get involved.

This decision could go a long way in how NFTs are seen from a different perspective. The verdict has added to the confusion as why this verdict can’t it be extended to the underlying value of NFTs. For investors and enthusiasts in the UK, NFT remains a tricky investment, which they should have a keen eye on.

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