NFTs under Brussel’s microscope

On November 24th, after nightfall, things were heating up despite sanitary measure on rue Saint-Sabin, a small street of Paris’ 11^th arrondissement, in the facilities of the auction house Fauve. The reason? A meetup entitled: “NFT: Not the French Time? Will the French art market miss the NFT revolution?”. This was caused by the current measure preventing the French operators to organize an auction of pure NFTs without a physical counterpart. “Concretely, explains Lucie-Eléonore Riveron, the Chairwoman of Fauve, while foreign operators, including Americans, for example, can just sell NFTs, in France this is not allowed. Which is therefore problematic, as France is one of the most active markets in terms of crypto-currencies.”

The participants of this meet-up were artists, collectors and Jean-Michel Pailhon, Vice-Chairman of Ledger, one of the world leaders in securing cryptos, as well as an important NFT collector. “The challenge, he says, is that there still is a confusion from a legal perspective regarding what an NFT stands for. An object, an artwork, an ownership certificate… legislation has not decided on the fiscality of NFTs either and on another number of issues.” To invest, buy or sell, to develop businesses, private or institutional actors need stability. However, the legal environment could very well change quickly. Not only in Paris but in all of Europe. Indeed, in Brussels, several current legislations directly concern crypto-assets, including NFTs: MiCA (Markets in crypto assets regulation), AMLR (anti-money laundering) and TFR (Transfer of Funds Recast). Globally, the legal environment in Europe is rather favorable to the development of digital assets. The European Parliament as well as the Commission consider as positive the development of unicorns with important objectives such as the “2030 digital decade” agenda.

NFTs are perceived as the future, and the legal scope is a way to encourage innovation and investments. Yet despite a context that seems favorable, the risks are not to be neglected for all operators such as: too many regulations, the arrival of a digital euro, restrictions in terms of data and security or market, as well as topics related to trust, transparency and energy consumption of this new ecosystem. “The European Union almost made Bitcoins and Ethereum illegal, says a lobbyist from Brussels. The crypto market regulations (MiCA) should have gone through in February 2022, but it was postponed as it would be banishing the most sought-after cryptocurrencies.”