ARTICLE · 19 AUGUST 2021

Taking Security Over NFTs: Some Legal Considerations Under Austrian Law

Schoenherr (Schönherr Rechtsanwälte)

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Schoenherr (Schönherr Rechtsanwälte)

Schoenherr is a leading European full-service law firm with a strong footprint across Central and...

The hype surrounding NFTs and crypto assets appears infinite and is raising more and more questions and challenges for the legal profession in Austria and beyond.

AustriaTechnology

Martin Ebner

Peter Ocko

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The hype surrounding NFTs and crypto assets appears infinite and is raising more and more questions and challenges for the legal profession in Austria and beyond.

NFTs can have significant market values: Only recently, an NFT asset of Beeple was auctioned for more than USD 69m. An obvious question is, therefore, whether NFTs can also serve as collateral.

The legal aspects of taking security over NFTs and other crypto assets in a global context are far from settled (see, e.g. the consultation on the review of the Financial Collateral Directive, in particular Qs 5.4 to 5.6 addressing certain crypto assets).

Nevertheless, we believe that blockchain entries can be an appropriate means for creating and perfecting security over NFTs. Also, blockchain technology offers creditor protection, because its decentralised design significantly reduces the risk of manipulation or errors.

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Taking Security Over NFTs: Some Legal Considerations Under Austrian Law

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