The NFTs : The CPGA’s analysis and support for galleries
30 Oct. 2021
As the guarantor of legal security for art galleries and the artists they represent, the Professional Committee of Art Galleries (CPGA) cannot ignore the NFTs (non-fungible tokens) that are now part of the range of goods that can be offered for sale on the art market. For several months now, the CPGA has been involved in the discussions on the regulation of the NFT market and the legal issues inherent to these goods, the sale of which still involves many grey areas.
Work in NFT format by French artist Morgan Paslier, "Flower_2 - 1/1", sold on Open Sea by the online gallery KAZoART
NFTs are a particularly innovative technological tool that offers new possibilities to art market players. Nevertheless, this tool is restrictive and full of unknowns, and can be a source of legal insecurity.
Art galleries have the capacity to position themselves as trusted third parties in the context of an NFT transaction. The development of sales of this type of goods is, however, part of new modes of consumption that are the antithesis of traditional art market practices.
In the context of an NFT transaction, it is therefore necessary for art galleries to be extremely vigilant on several levels, in particular :
- In terms of the copyright of the artist concerned by the work linked to the sale,
- In terms of the rights of consumers for successive purchasers,
- In terms of the general terms and conditions of sale applicable to the transaction,
- the tax rules applicable to the transaction and to the life of the NFT,
- the risks of money laundering that the transaction may present.
Some players in the art world are questioning the sustainability of this global tool given the speculative aspect of the sales, suggesting that it is a temporary bubble. Nevertheless, certain technical and structural developments, particularly in Asian countries, bear witness to a system that is in place for the long term.
Regularly consulted on this subject, the CPGA has been invited by the Institut Art & Droit to speak on 18 October 2021 at a conference on “NFTs and the art market”, under the direction of Blanche Sousi, Professor Emeritus of the Université Jean Moulin Lyon 3. Gaëlle de Saint-Pierre, in her capacity as a lawyer, spoke on this subject. (Link to listen to the speech)