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Talks This Week May Decide the Future of NFTs in the EU

BY Jex Exmundo

June 29, 2022

European Union (EU) negotiators are meeting this week in an attempt to finalize a broad range of rules related to crypto and NFTs. Specifically, the new regulations are aimed at combatting money laundering and could establish an authorization regime for crypto service providers.

The documents were prepared by France, CoinDesk reports.

Notably, these rules could force people who create non-fungible tokens (NFTs) to centralize and register with governments. According to the documents, this means that an NFT creator would need to be “a legal person rather than a decentralized entity.” As a result, they would have to register their information with the authorities and comply with other consumer-protection measures set out in the law.

Currently, it’s unclear how these rules would impact DAOs, and if initiatives like Vitalik Buterin’s planned Soulbound Tokens can still permit creators to function in the space pseudonymously.

There are some topics left to cover during discussions that may prove to benefit the NFT community as a whole, though. For instance, talks on the Markets in Crypto Assets Regulation (MiCA) continue until June 30. The document ultimately notefs that the new rules would “significantly broaden the scope of the MiCA regulation” beyond its existing focus on cryptocurrencies and into NFT assets from the world of art, entertainment, and gaming, the document said.

The MiCA law hopes to provide a framework for crypto-assets such as NFTs to fairly — and legally — thrive in markets governed by the European Union. With this law, the EU hopes to grant much-needed legal jurisdiction over NFT creation and trading, which may allow legal entities to formally prosecute anyone caught attempting a rug-pull. Also under the MiCA law are plans to protect consumers, investors, and market integrity with regard to the volatility of the crypto and NFT market.

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