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NFTs can be considered property in Singapore
In October, 2022 Singapore’s High Court decided that NFTs can be considered as property. The ruling formed part of Singapore’s first written judgement on a case involving an NFT. This ruling is also the first of its kind in Asia and is expected to help cement Singapore’s position as a blockchain hub.
In this article we will take a look at what was said in the ruling and how this will affect NFTs in Singapore.
What are NFTs?
NFTs are essentially tokens that exist on decentralised digital ledgers, which are more commonly known as blockchains. NFTs can be used to represent various different assets (digital or physical), such as artwork, videos and music.
What did Singapore’s high court say?
Justice Lee Seiu Kin held that NFTs could be considered as property in Singapore. The reason for this is because NFTs fulfil the legal requirements that are used to distinguish what makes up property.
Such requirements include:
- being easily distinguishable from one another and;
- having owners capable of being recognised by third parties.
How do NFTs constitute property?
Justice Lee Seiu Kin states that the description of the NFT that was subject of the court case could not be described as a “very unique artwork, and the only one in existence”. The NFT exists as an image file which can be copied many times over, thus is not necessarily unique.
However, what is truly unique and irreplaceable about an NFT is the string of code for the NFT which appears on the blockchain. It is these lines of code which help satisfy the legal requirements mentioned above for distinguishing property.
It is hoped that this ruling will help to settle the debate of whether to characterize NFTs as mere information or property.
Labelling an NFT as information would ignore the unique relationship between the encoded data and the blockchain system which enables the transfer of this encoded data from one user to another in a secure, and verifiable fashion.
What else was decided in the judgement?
It was also held that courts in Singapore could hear cases related to blockchains despite their decentralised nature.
The court’s decision is expected to pave the way to reinforce Singapore’s status as a legal and blockchain hub. Furthermore, this decision may prove a significant moment for NFTs as investors and traders can now have more confidence that their status of the NFT will now be considered property in law.
How can Belaws help?
To learn more about blockchain in Singapore, why not take a look at our Blockchain services.
Additionally, you can talk directly to one of our experts.
Please note that this article is for information purposes only and does not constitute legal advice.
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