UK Law and Practice Contributed by: Margherita Barbagallo, Sanskriti Mohta and Nilojana Nirmalan, Dragon Argent
is illegal under the Protection of Children Act 1978. Newer offences also cover “up-skirting” and sharing private, sexual photographs without consent. 9. Artworks and New Technologies 9.1 NFTs At its core, an NFT (non-fungible token) is a unique digital file that resides on a digital ledger known as a blockchain. Each NFT is distinct because it is encoded with a cryptographic “hash” – a unique string of letters and numbers that functions as an identifier, authenti - cating the original file and verifying that it is the only digital asset with its specific attributes. Thanks to the tamper-resistant nature of blockchain technology, the token cannot be copied, removed or destroyed, and it can be tracked back to its real owner without the need for third-party verification. The recent Property (Digital Assets etc) Act 2025 now confirms in statute that things such as NFTs can be personal property under English law. This means that they are not merely data but can be owned, bought, sold and treated as assets in their own right. Block - chain technology protects this ownership, giving the owner the exclusive right to conduct transactions and transfer the token. Even the issuer of the NFT cannot replicate or transfer it without the owner’s permission. However, ownership of an NFT is distinct from owner - ship of the copyright in the underlying artwork. Upon purchasing an NFT, you own the token itself but do not automatically own the underlying asset unless there are terms to this effect encoded in the smart contract. Beyond the art world, NFTs have broader applications: they can be used to tokenise documentation such as academic certificates, licences, medical records and birth certificates, giving users better control of their data and helping to prevent identity theft. In the future, using NFTs and blockchain could be an efficient way to check property titles and verify ownership history, although concerns regarding security and the risk of losing private keys still need to be addressed. 9.2 Counterfeit NFTs The marketplace for NFTs is currently susceptible to inauthentic and counterfeit works. Because the bar -
rier to entry is low, individuals can mint an NFT of an artwork they did not create and offer it for sale, pass - ing it off as their own. Several common frauds have emerged in this space. Fraudsters create replica or fake NFT online stores, using domain names, designs and logos of legitimate platforms to attract customers and sell NFTs that do not exist. Others create coun - terfeit NFTs that impersonate original artworks and certify the authenticity of the underlying asset without the artist’s permission. Social media scams are also prevalent, where fraudsters create fake community groups and direct subscribers to buy non-existent or counterfeit NFTs. Additionally, digital wallets are tar - geted by phishing scams or hacked to gain access to NFTs, cryptocurrencies and cash accounts. The pseu - donymity offered by cryptocurrency when purchasing NFTs also creates money laundering risks, and “wash trading” – where the seller is on both sides of a trans - action to artificially inflate an asset’s value – has been used to manipulate the market. The recent legal clarification that NFTs are property under the Property (Digital Assets etc) Act 2025 is significant here. It provides a statutory basis for legal action against such fraud. The owner of the copyright in the original artwork, or the artist themselves, can now more clearly assert their property rights. They can potentially take legal action against the platform host - ing the counterfeit NFT and seek remedies against the fraudster, such as injunctions to prevent the dis - sipation of any proceeds from the fraud. The legal framework is evolving to treat these digital forgeries as the misappropriation of property, offering stronger protection than was previously available, although the practical challenges of enforcement in a global digital environment remain significant. 10. Gifts, Donations, Trusts and Inheritance 10.1 Planning for Generational Transfer of Artworks Planning the transfer of an art collection requires a holistic approach that combines tax, legal and practi - cal considerations.
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