Navigating the Challenges of NFT Legal Issues

As someone who wants to break into the world of digital art and non-fungible tokens (NFTs), there’s one refrain you’ve probably heard more times than you can count: “Make sure you understand the NFT legal landscape.” But what does that even mean? If you’re feeling overwhelmed by these uncharted waters, know that you’re not alone. Even seasoned artists struggle with the legalities surrounding NFTs. Our goal in this story-packed blog post is to help you navigate through the murkiness and give you a clear idea about NFT legal.

The Buzz About NFT Legal

NFTs have been making headlines in recent times – from Beeple’s digital artwork selling for $69 million to Jack Dorsey, Twitter’s founder, selling his first tweet for $2.9 million. According to data, the total NFT transactions exceeded $2 billion during the first quarter of 2021. However, with this astronomical rise, NFT legal issues have also surged, burdening artists and sellers with unprecedented legal challenges.

“Brian, an artist based in downtown Philadelphia, was ecstatic when he sold his first digital artwork as an NFT,” said a close confidant of his. “But his joy was short-lived when he was confronted by legal complications he had not anticipated, raising questions about copyright, royalties, and intellectual property.”

The Specter of Copyright Infringement

One of the main concerns you might have, like Brian, is copyright infringement in the NFT space. With NFTs, the buyer gets ownership of the token – not the copyright to the art linked to it. Unless expressly transferred, the copyright remains with the artist. This misinterpretation often leads to disputes and legal dilemmas.

Unpicking the NFT Legal Tangle: A Hypothetical Scenario

Let’s consider a hypothetical situation involving one of our readers, Amy, a Philadelphia-based digital artist.

“I’ve always loved creating art,” Amy told us during a recent conversation. “When I heard about making money from my creations through NFTs, I was thrilled. But then I started to look into the legal side of things, and it was like stepping into a minefield.”

Her first artwork sold as an NFT was a digital portrait. But the buyer resold copies of her work, assuming that was within their rights, and Amy was heartbroken.

“I felt like a piece of me was stolen. I’d poured my heart into my artwork, and that was just callously replicated without my consent.”

How could have Amy protected herself and her digital artwork? Here are a few strategies:

  • Clearly specify the terms: Verbally communicate or attach a legal agreement specifying terms of the sale, including any restrictions on the use and resale of the artwork.
  • Seek legal advice: Consult with a business or intellectual property professional. They can help understand nuances, frame agreements, and avoid potential copyright issues.
  • Consider licensing: Consider licensing the artwork. Licensing will allow the buyer to use the artwork under specified conditions while retaining copyright.

The Future of NFT Legal Landscape

Debates around NFT legal are gaining momentum both nationwide and globally as jurisdictions tackle these issues. While the current legal framework may seem murky, we can hope for increased clarity and regulations in the future.


What do I own when I buy an NFT?

  • When you buy an NFT, you own the token – not the copyright to the artwork associated with it.

Can I resell an NFT that I’ve purchased?

  • Yes, NFTs can be resold. But the terms, including royalties for the artist, should be specified in an agreement.

Does owning an NFT mean I hold the copyright for the artwork?

  • No, the copyright remains with the artist unless it’s expressly transferred.

Can an artist sue if their artwork is replicated without their consent?

  • Yes, if an artist retains the copyright of their work, they can take legal action against unauthorized replication.

How can I protect my digital art from NFT legal challenges?

  • Specify your terms of sale clearly, seek legal advice, and consider licensing your artwork to protect against unauthorized use and replication.

Through this story-driven narrative about the NFT legal framework, we have a deeper understanding of what it feels like to navigate this complex landscape. It’s important to remember that knowledge is power. Enabling yourself with the law can lead to a more successful and less painful journey as a player in the NFT world.

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