NFTs Are Legally Problematic ft. Steve Mould & Coffeezilla

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Sorry, occupational hazard: This is not legal advice, nor can I give you legal advice. I AM NOT YOUR LAWYER. Sorry! Everything here is for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem. Nothing here should be construed to form an attorney-client relationship. Also, some of the links in this post may be affiliate links, meaning, at no cost to you, I will earn a small commission if you click through and make a purchase. But if you click, it really helps me make more of these videos! All non-licensed clips used for fair use commentary, criticism, and educational purposes. See Hosseinzadeh v. Klein, 276 F.Supp.3d 34 (S.D.N.Y. 2017); Equals Three, LLC v. Jukin Media, Inc., 139 F. Supp. 3d 1094 (C.D. Cal. 2015).

Special thanks:
Stock video and imagery provided by Getty Images and AP Archives
Music provided by Epidemic Sound
Maps provided by MapTiler/Geolayers

00:00 Intro
01:00 What are NFTS?
02:00 Steve Mould’s Technical Explanation of NFTs
05:54 NFTs as Digital Receipts
06:54 On Chain Problems: Contract Law
09:36 NBA Top Shots
11:20 Bored Ape
12:30 Click-Wrap Agreements
14:50 Smart Contracts
16:27 Copyrights
22:35 So Many Consumer Protection Issues!
26:53 But Wait….Are NFTs Actually Securities?
29:41 Coffeezilla Explains the Scammy Nature of NFTs
30:43 More on Market Manipulation
33:17 What About the Off-Chain Problems?
41:06 Innovations So Mundane, No One Should Care!
44:12 Learn More About the Dangers of NFTs on Nebula

[santeroel]

The more I listen to this, the more the whole NFT world seems like a MLM meant for slightly computer literate people who think they are too smart to fall for MLMs.

[milkteamachine]

Every time someone claims that NFTs benefit creators, I remember that one time someone minted NFTs using art by an illustrator who died of cancer just months prior, and people told her family that they should have just minted it themselves if they didn’t want this to happen :)

[collettehinz]

Minting an NFT without permission of the artist led deviant art to create an entire program that scanned open seas which notified an artist when their art showed up as an NFT. Open seas mostly ignored all takedowns issued by the victims. NFTs are not for artists.

Also it's hard to take legal action against those who are smart enough to remain truly anonymous for a pump and dump

[RoseDragoness]

NFT felt like buying and selling stuffs on an MMO. The people that play the same MMO may able to value your purchase, but people outside the game would pull their hair of how you spend hundred to thousand dollars for a single digital sword. And when the developers decide to close the game, you cant demand anything about it.

[vexmythoclast]

So it’s basically the same as “adopting” an animal at a zoo, right? You get a little certificate congratulating your donation but you don’t own the animal, just that certificate.
But some reason someone made buying and selling these certificates an actual market.

[angelagunn]

"Just look at this stuff. This is bad art. And if you're claiming that this art is inherently worth hundreds of thousands of dollars apart from any speculative value... (pause) uh... I don't think you're good at art." Literally shouted over here. That was glorious.

[kelaEQ]

To me NFTs are about as "Legitimate" as "Naming a star" after someone. It is technically not a scam but also are not actually getting anything either.

[lisahenry]

"Programmers are really bad at understanding contract law"
I wonder if that's the reason my uni has a mandatory 'Law and finance' module for enginnering students (including computer science students) and one of the topics is contract law.

[NCHProductions]

I think this is my first "NFT explains" video I watched that actually showed me the url link and how that url link works/breakdown of the actual
Finally got to see and actually learnt how the url works.

[rudeboyspodcast]

I can't recommend "Line Goes Up" enough for people who want to learn about the history of NFT's and how they're being used and abused. Thanks for covering the legal aspects in detail here!

[boxhead]

Additionally with Consumer Protection, NFTs are sold globally which means they run foul of consumer protection laws of other countries which are far stricter on terms, conditions and liabilities than the US market. (For example in Australia, even as a US company, since the consumer is Australian, your bound by Australia law to deliver a working product). That failure to deliver on all promises and features of your "NFT" can still be considered fraud.

[EdrickBluebeard]

I once believed that planking was the dumbest thing I'd ever see on the internet, but every year, the internet exceeds my expectations.
NFTs are just... bafflingly absurd.

[umbra]

Actually, a star in a faraway galaxy is an interesting comparison, because that's really very similar to nfts. Plenty of places claim that they can sell you stars, but no one official actually recognizes those as authorities. All you've bought is a line in one company's star catalog. Another company could easily sell someone else the same star, because no one actually owns it.
(Edit: clarity)

[TheBronyBraeburn]

The more I learn about NFTs, the more I'm confused and convinced it's all a scam.

EDIT: Didn't expect this to blow up. Wow. Let me clarify: NFT art is 100% scam. You can't convince me otherwise.

NFTs as a concept is still confusing to me but at its core, it's fine. Does it have a practical use? I'm sure it can be used as such.

[eternalskeptic]

NFT's are a great modern example of the old adage:
"A fool and their money are soon separated."

[MGlBlaze]

Given the recent influx of AI generated art lately, it's interestring to rewatch this and catch the bit about precident in US law regarding "Only a human can make a work that is copyrightable."

[jacobpatton]

“Programmers are really bad at contingencies.”
Me a programmer: looks up what a contingency is.

[SsnakeBite]

I'd also like to remind everyone that you don't need an NFT in order to acquire a copyright or otherwise form a contract. That's how ownership, including digital ownership, has worked forever and adding an NFT to the mix does not in any way facilitate this (if anything, it needlessly complicates things by making people with more money than sense believe that they own things that they don't).

[genisay]

A lot of artists hate them because it's just another way for someone to steal your work and make money off of it. Practically made for people to be able to make more of a profit from being art thieves. I think this is also important for anyone getting into NFTs to view.

[KrissieDeathy]

I have a coworker who sees me making animations during my breaks and constantly asks me about turning my stuff into NFTs even though I keep saying no. Not interested. They have a bad rep. He still brings it up. Might show him this video next time