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  • Writer's pictureGerard Kavanagh

NFT is legal property

Interesting article from Asia, a hot zone of activity in the crypto-verse: NFTs: digital asset ruling in Asia helps local lenders ( "Bored Ape Yacht Club’s non-fungible tokens have been purchased by celebrities including the musicians Snoop Dogg and Madonna. As their notoriety and value rose, more owners began to use these digital certificates as collateral for crypto loans. A legal dispute over one NFT could prove helpful to one of Asia’s biggest exchanges. Bored Ape NFTs feature pictures of raffish looking cartoon apes. When launched in 2021 by Yuga Labs, prices were about $190. Within six months, a set of 107 apes was sold for more than $24mn at auction house Sotheby’s. Critics see steep NFT prices as evidence of human gullibility at a time when money is cheap. But the status of NFTs as financial assets that can be borrowed against has now been made official in Asia. In May, a man in Singapore won a court injunction to stop the sale of an NFT that once belonged to him and was used as collateral against a loan. It is the first such injunction anywhere in the world.

The decision recognises digital assets such as NFTs as legal property. This distinction is good news for Singapore lenders such as DBS, which have been betting heavily on digital assets — encouraged by the city-state’s attempt to become a multi-asset financial hub. DBS, one of the biggest financial services groups in Asia, has a new digital exchange offering trading and custody services. Singapore Exchange has taken a 10 per cent stake.

Both need a boost. SGX’s net profit attributable to equity holders fell nearly a tenth in the half year to December. At DBS, first-quarter profit was down a tenth on the year, as net interest margin, fee income and other non-interest income declined. Salary increments pushed up expenses. A sharp drop in the overall value of digital assets this year means trading volumes could stay depressed in the coming months. But early mover advantage in digital assets could add value longer term. NFT prices may have fallen but the cheapest Bored Ape NFT is still priced at $200,000." "This landmark ruling is significant because it recognises that Singapore courts can take jurisdiction over assets sited in the decentralised blockchain," says Withers KhattarWong partner Shaun Leong. Great ..... AWESOME news .... for FIX00 NFTs and you ..... Rule of law is 9/10 of the game of legitimacy, beyond the fact that "The decision recognises digital assets such as NFTs as legal property." The more this happens the more legitimate and tangible (from a real-world banking perspective) becomes the NFT .... it is in the eyes of the law an ASSET. The more this happens the greater the ability to borrow against such assets in the real world, it's a reflection of the quality of the asset/NFT - naturally borrowing and staking such assets is already de rigueur in cryptoland. As this starts becoming more commonplace in the real world (which is clearly a process begun) the more valuable becomes the asset (the NFT). Asset-Backed Art (ABA) is a term we have started dropping of late in reference to our forthcoming NFTs ..... that rather grandiose term is looking more and more appropriate (a major lift for those early buyers/adopters) Onwards and upwards Tally ho

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