EU May Be Cracking Down On NFTs

Despite comments to the contrary, it looks like the EU’s big crypto regulation framework will cover NFTs after all.

Just because the EU’s various arms, including the European Parliament (EP) and European Central Bank (ECB), said that the deal it struck to pass the Markets in Crypto-Assets (MiCA) bill excluded non-fungible tokens, doesn’t mean it will in practice, a European commissioner suggested at the Korea Blockchain Week conference on Aug. 9, CoinDesk reported this week.

In reality, any NFT that is part of a collection — which is to say, virtually all of them — will likely have to abide by the EU rules designed to provide token buyers information about the tokens and their risks, Peter Kerstens said.

EU legislators “take a very narrow view of what is an NFT,” Kerstens said, CoinDesk reported. “If a token is issued as a collection or as a series — even though the issuer may call it an NFT and even though each individual token in that series may be unique — it’s not considered to be an NFT, so the requirements will apply.”

Read More: EU May Change Crypto Regs to Include NFTs

The European Council’s release describing the MiCA agreement reached on June 30 said that “digital assets representing real objects like art, music and videos, will be excluded from the scope except if they fall under existing crypto-asset categories.”

It added that a “comprehensive assessment” and, if necessary, a specific legislative proposal addressing the NFT market and its risks would be due in 18 months.

What it comes down to, Kerstens said, is a difference of opinion between the national governments, who saw adding NFTs as pushing to far from the core of a bill designed to protect investors from risky stablecoins and cryptocurrency offerings. However, the European Parliament was more concerned about issues like price manipulation, CoinDesk said.