German regulator BaFin suggests a ‘case-by-case’ approach for NFTs

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The German Federal Financial Supervisory Authority (BaFin) is not ready to classify non-fungible tokens (NFTs) as securities. FDA is proposing to classify NFTs on a case-by-case basis.

March 8, BaFin Journal It was published A description of NFTs and their legal classification. At this time, the regulator does not understand how his NFTs meet the standards of tradability and standardization that define securities. However, in the future, BaFin may consider NFTs as securities. For example, 1,000 NFTs embody the same repayment and interest charges.

According to another reservation, if an NFT contains a license or proprietary document, such as a promise of distribution, it may be considered an investment.

The agency recommends a case-by-case approach to categorizing NFTs when it comes to their status as “crypto assets.” However, according to BaFin, the likelihood that NFTs represent “crypto assets” is even less than the investment category, given the lack of immediate convertibility. Also, the lack of standardization has left NFTs out of the status of “e-money”.

Given the difficulty of classification, BaFin does not expect NFTs to comply with the licensing requirements of the Payment Services Supervision Act. Also, NFTs are not currently subject to BaFin’s anti-money laundering (AML) supervision, except for non-fungible assets that fall under the category of financial instruments. The exception is NFTs, which may at other times be considered “crypto assets”.

Related: Germany’s DZ Bank adds digital currency to wealth management services

According to Metaverse platform Metajuice, nearly three in four NFT collectors on the platform buy NFTs for status, uniqueness and aesthetics. Also, only 13% of survey participants said he would buy NFTs for future resale.