NFTs Will Also Be Regulated in the Same Way as Crypto Currencies Under the EU’s MiCA Law

The world has been focused on events in the crypto circles lately, to the point that everyone seems to have forgotten about NFTs. However, the digital currency meltdown also affected NFT investors in the same way as it did other areas of the Metaverse.

In the wake of these problems being experienced by investors, many people have called for tighter restrictions to be imposed on NFT companies. One of the first countries to take a stand against the rampant fraud among crypto traders was the US.

Now it seems the European Union (EU) is also following suit. The new Markets in Crypto Assets (MiCA) law was previously reported to be targeting other forms of digital currency excluding NFTs. However, recent announcements seem to suggest that this stance has since changed.

EU legislators are said to be taking a very narrow look into NFTs, specifically what constitutes a Non-Fungible Token. In theory, the law has not changed regarding the exclusion of NFTs from the set regulations. What has changed is that NFT developers now have a harder time proving that their digital creations are NFTs.

If a digital creation is deemed to not meet the set standard of what an NFT is, then it will be subject to the same regulations as other crypto assets. This new law, once it is fully drafted and put into practice, will make it harder for scammers to ensnare unsuspecting victims by making misleading statements.

The European Commission is the one that first proposed the draft that would later become MiCA law. While this draft has not yet been put into practice, when it finally gets the nod, NFT investors are likely going to go through more obstacles than they are now.

OpenSea Will Also Be Tightening the Screw on Cyber Crime

Digital assets giant, OpenSea, is also making some changes to further safeguard its users. These changes mainly revolve around how OpenSea deals with assets that are reported as stolen.

In the past, users have blamed the marketplace for punishing users who buy stolen NFTs by mistake. NFT scams have been on the rise lately, and OpenSea, as the biggest Web3 marketplace, has been forced to lead by example in the fight against digital crime.

One of the first steps towards this change was last Tuesday’s Twitter announcement by OpenSea representatives that the platform was finally changing the way it handles cases of stolen NFTs.

Previously, stolen NFTs were simply blocked from being sold or traded in any way. This was a major disadvantage to the buyer who would have bought the assets without knowing anything about where they came from.

The new policy now states that a police report is required within seven days of the incident, a move that is hoped will reduce the number of false reports, as well as prevent punishing innocent victims unnecessarily. These changes will only apply to new cases of stolen NFTs, not already existing ones.

ZachXBT Exposes Two French NFT Scammers

Meanwhile, Crypto investigator ZachXBT scored a few points for the good guys recently when they exposed two French NFT scammers who are accused of having defrauded BAYC users of millions of dollars.

Besides the BAYC offense, these two scammers are thought to have been involved in many other similar deals worth huge sums of money. Their first victim was a Twitter user by the name of Dilly Dally. The user made the mistake of clicking on a link, believing that it was from a verified member of the BAYC.

He said he thought the link was for an app that would have allowed him to animate his BAYC token. However, it turns out he had unwittingly opened up his account to the scammers who were then able to steal his BAYC NFT. They later sold it for $178 000.

Conclusion

With all these scams happening, as well as the increase in other forms of cybercrime within the NFT community, it is no surprise the European Commission has decided to step in and increase the regulations imposed on digital assets. Only time will tell how effective these protocols will be against determined crypto scammers.