No NFTs Are Securities – Yet, German Finance Officials Say

Classification of the ownership tokens as a financial instrument would imply licenses and money laundering supervision, according to regulator Bafin.

AccessTimeIconMar 8, 2023 at 11:16 a.m. UTC
Updated Mar 8, 2023 at 4:00 p.m. UTC

No non-fungible tokens (NFT) are yet classified as securities – a status that would require licenses and money laundering supervision, German financial regulator BaFin said Wednesday.

Using the blockchain-based tokens that denote ownership of a digital asset for pure speculation doesn’t make it an investment instrument, but some NFTs in future could fall under financial regulations – for example, if a large set offer the same interest payments, the article by BaFin officials said.

“So far, BaFin is not aware of any NFTs classified as securities in the regulatory sense,” the article said. “However, it cannot be ruled out that NFT will be classified as a security in the future.”

Financial instruments would make linked services like investment advice or brokerage subject to regulatory scrutiny – but proof of ownership of collectibles or artwork are unlikely to count under money laundering laws, the article said. It added that regulators need to take account of the stability and integrity of the financial system.

How to treat NFTs has been a crucial issue for the Markets in Crypto Assets (MiCA) regulation, set to apply in Germany and across the European Union within a few years. The final deal requires regulators to look at the substance of what an NFT offers, rather than any mere marketing claims.

In the U.S., whether particular crypto assets fall under the Securities and Exchange Commission’s purview has also been a point of contention in a range of legal cases.


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Jack Schickler

Jack Schickler was a CoinDesk reporter focused on crypto regulations, based in Brussels, Belgium. He doesn’t own any crypto.