Non-Fungible Token Litigation: The Early Years

Abstract

NFTs, or non-fungible tokens, present a valuable case study of the ways in which courts fill in the gaps where technological development gets ahead of regulation. In this Article, I offer a descriptive account of the first three years of litigation involving NFTs to come before federal district courts. These early cases implicate intellectual property and “traditional” property disputes, fraud and breach of contract claims, securities regulation, alleged criminal conduct, and service of process issues. This Article will be of particular interest to practitioners advising clients in the crypto industry and to legal scholars teaching or writing about law and innovation in general or crypto in particular. NFTs caught many consumers, courts, and lawmakers off guard in 2021 when they started selling for vertiginous prices despite the fact that they do not, in certain key respects, exist. Some predict that NFTs will come to assume an increasingly central role in art and commerce, while others see NFTs as an unfortunate trend that has already passed its expiration date. Whatever the NFT’s fate, it will not be the last disruptive technology to capture the public imagination and excite the market, with enthusiasm fast outpacing lawmakers’ ability to make sense of the innovation and propose sensible guardrails for its use. This Article tells the story of one such technology that has challenged settled assumptions about art, ownership, and value.