NFTS IN NIGERIA
According to a poll from Finder.com, 13.7 per cent of 1,205 Nigerian Internet users who were polled, currently own a non-fungible token (NFT) while an additional 21.7 per cent said they plan to acquire some.[10]
Nigerian artists have not also been left out from the shift towards digital goods and services. Most notably, Jason Osinachi sold two NFTs for $16,227 (sixteen thousand, two hundred and twenty-seven US Dollars) and $23,633 (twenty-three thousand, six hundred and thirty-three US Dollars) respectively.[11]
The money and buzz surrounding NFTs in Nigeria has prompted an inquisition into the regulatory framework surrounding NFTs, and what the possibilities and challenges are for creators and buyers alike.
LEGAL ISSUES SURROUNDING NFTS
1. Intellectual Property: Section 15(1)(d) of the Copyright Act states that a person is liable for copyright infringement, where he or she without the licence or authorisation of the owner of the copyright, distributes by way of trade, offers for sale, hire or otherwise or for any purpose prejudicial to the owner of the copyright, any article in respect of which copyright is infringed.
A mere digital transaction might not suffice for an assignment of an exclusive license to the digital asset, as contemplated under the Nigerian copyright law.
Accordingly, sellers and creators must take care to only list for sale, NFTs of artworks which they have intellectual property rights over, as opposed to selling a copy of a digital copy of an artwork, without the consent of the owner. This also relates to Section 25 of the Cybercrime (Prohibition, Prevention, etc) Act 2015 (Cybercrime Act) prohibits Intellectual Property infringement on the internet.
2. Data Privacy: Under the Nigeria Data Protection Regulations 2019, marketplaces i.e. internet platforms where NFTs are sold, must make sure that they have the consent of the data subject (sellers and creators alike), before obtaining their personal data.
Individuals have a right to request the erasure or rectification of inaccurate personal data, under Nigeria’s Data Protection Regulation 2019.[12] However, blockchain-based creations such as NFTs, with their unchanging nature, make it difficult to execute this right and may render it impossible to exercise. Consequently, it seems that NFTs that contain personal information may violate Nigeria’s current data protection law.[13]
3. Investment Issues: The SEC defines a Crypto asset as a digital representation of value, that can be digitally traded and functions as: (i) medium of exchange; (ii) unit of account; and (iii) store of value, but does not have legal tender status in any jurisdiction. As noted above, NFTs are unique in their nature as Cryptoassests.[14] They may be subject to regulation by the Securities and Exchange Commission (SEC) in some instances. If they fall within the scope of digital assets, the SEC is in charge of regulating NFTs. However, an initial assessment will need to be done to determine this.