NFT

An NFT is not the artwork itself—it’s a blockchain-based certificate that links to a digital or physical item. The token’s metadata identifies ownership but does not automatically transfer copyright or commercial rights. SJKP LLP helps clients draft and interpret NFT-related agreements to ensure that ownership, licensing, and usage rights are clearly defined.

In some cases, regulators have examined whether NFTs may qualify as securities—particularly when fractionalized, yield-generating, or marketed as investment products. Our team conducts Howey Test analyses and advises clients on structuring NFT projects to avoid unintended securities classification. Where necessary, we assist with SEC compliance and registration exemptions.

NFT marketplaces face unique legal challenges, including KYC/AML obligations, consumer protection rules, and intellectual property enforcement. SJKP LLP counsels platforms on user agreements, takedown procedures, royalty enforcement, and fraud prevention mechanisms that align with U.S. and international regulatory expectations.

Under copyright law, the creator of the original work retains rights unless explicitly transferred in writing. Purchasing an NFT typically conveys ownership of the token, not the artwork’s copyright. We draft clear license terms and smart contract provisions that define scope of use, reproduction, and commercial exploitation rights, protecting both creators and buyers.

NFTs incorporating logos, brand imagery, or celebrity likenesses must comply with trademark and publicity rights laws. We help clients secure necessary permissions, manage brand licensing agreements, and respond to infringement claims to prevent reputational and financial harm.

Because NFTs can be minted and distributed globally, enforcing IP rights requires coordinated legal and technical strategies. SJKP LLP assists clients in filing DMCA takedown notices, initiating platform-level complaints, and pursuing infringement claims in court when necessary.

Smart contracts automate NFT transactions but can raise enforceability questions under contract law. Our attorneys draft hybrid agreements—pairing blockchain-based execution with legally binding off-chain terms—to ensure enforceability in multiple jurisdictions.

We assist NFT marketplaces and creators in developing terms of service, royalty structures, and secondary sale provisions. Proper drafting helps ensure that royalties are legally enforceable and compliant with consumer and tax regulations.

NFT buyers often face deceptive marketing, price manipulation, or authenticity concerns. SJKP LLP advises on compliance with FTC advertising rules, state unfair trade laws, and platform-level dispute resolution processes to maintain transparency and protect end users.

The IRS treats NFTs as property, meaning each sale or trade triggers a taxable event. We help clients calculate capital gains, determine fair market value, and structure transactions for efficiency. For creators, NFT minting and royalties may constitute ordinary income subject to self-employment tax.

NFT platforms dealing with high-value transactions are increasingly targeted for money laundering and sanctions violations. SJKP LLP designs AML/KYC programs tailored to NFT operations—covering customer verification, suspicious activity monitoring, and OFAC sanctions screening.

International NFT transactions often trigger value-added tax (VAT) or withholding tax obligations. We assist multinational clients in mapping tax exposure, coordinating with local counsel, and complying with cross-border reporting frameworks.

The SEC has launched investigations into NFTs marketed as investment vehicles or tied to revenue-sharing arrangements. Our firm represents issuers, artists, and platforms during inquiries and enforcement actions, preparing responses and negotiating favorable resolutions.

NFTs can be stolen through phishing, wallet hacks, or smart contract vulnerabilities. We advise clients on recovery options, insurance claims, and litigation strategies to mitigate loss. Our attorneys also coordinate with cybersecurity experts to strengthen preventive measures.

Ownership disputes frequently arise over authenticity, duplicate minting, or broken royalty promises. We represent clients in mediation, arbitration, and litigation to enforce contractual rights and restore commercial integrity.