What Am I Bidding for, the First NFT?
In Free Holdings Inc. v. McCoy et al, No. 22-CV-881 (JLC) (S.D.N.Y., March 17, 2023), Magistrate Judge James L. Cott confronted an unclear issue regarding ownership of non-fungible tokens (“NFTs”), which are assets that have been tokenized via a blockchain. NFTs can be unique and quite valuable. The court in Free Holdings considered the issue whether initial registration of an NFT is the asset, or whether re-registration creates a new asset. Resolution of the issue has significance, because different individual entities have made competing claims to ownership based on registration status.
In 2014, Defendant Kevin McCoy, a digital artist, created a digital record of ownership of his work “Quantum.” McCoy registered the record of ownership under a “Name” on the Namecoin blockchain. With this registration, McCoy was credited as creating “the first NFT.” The Namecoin platform provided a disclaimer stating...