In a landmark case reported in The Art Newspaper on 29 April 2022, the UK court has ruled that NFTs (non-fungible tokens) are considered property. The action was brought by Lavinia Osbourne in March this year claiming that two digital works from the Boss Beauties collection—Boss Beauties number 680 and 691—listed on OpenSea had been stolen from her crypto wallet.

Boss Beauties is a collection of 10,000 NFTs created to recognise that “a woman can be everything she wants”. Holders of Boss Beauties NFTs enjoy certain benefits such as tickets to exclusive music festival and future partner collaborations.

In the judgement, the judge held that the NFTs were property and “thus able to have access to legal protections”. In this instance, the court issued an injunction to freeze certain accounts connected to the stolen NFTS maintained with Ozone Networks (the host of OpenSea).

The court decision that NFTs are property follows closely the conclusions reached by the UK Jurisdiction Taskforce published in the Legal Statement on Cryptoassets and Smart Contracts in November 2019—where it was concluded that “cryptoassets are to be treated in principle as property”.

There is no single agreed definition of cryptoassets. Generally, “cryptoassets are a cryptographically secured digital representation of value or contractual rights that is powered by forms of DLT and can be stored, transferred or traded electronically”. It is clear from the decision that the court has treated NFTs as a form of cryptoassets.

Once the judgment is available, we will blog about that judgement. So stay tuned!