Leaked MiCA draft suggests EU sees some NFTs as securities

According to a leaked draft of the EU Markets in Crypto Assets legislation (MiCA), a new revision reportedly includes mention of fractionalized NFTs.

The landmark bill will welcome strict regulations for cryptocurrency. While MiCA is still open for comments, it’s essentially finalized, sources told CoinDesk. Under a new provision, fungible tokens represented as one NFT could resemble securities.

“The issuance of crypto assets as non-fungible tokens in a large series or collection should be considered as an indicator of their fungibility,” text at the beginning of the final version of MiCA reportedly says (our emphasis).

While this portion of the bill — known as a recital — is not legally binding, it establishes the raison d’etre for the provisions of MiCA. As noted by CoinDesk, a recital can help lawmakers “interpret the scope of the legislation.”

Read more: Opinion: EU’s MiCA set to raise bar for crypto regulation — with some challenges

Previous versions of MiCA made no mention of NFTs. Indeed, truly non-fungible assets won’t fall under the new legislation. However, a collection of interchangeable assets marked as one unique token has given lawmakers pause.

The finalized bill says that regulators must “adopt a substance over form approach under which the features of the asset in question should determine the qualification, not its designation by the users.”

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