Business NFT tokenization and its legal implications in
Canada
Can you breach securities law by trading or issuing non-fungible
tokens (NFTs)? An individual was recently arrested
in the US for insider trading in NFTs.1 This
article focusses on the securities law implications of NFTs and
their tokenization.2
NFTs are a growing digital asset class that raises novel legal
issues. NFTs can be tokenized to allow for part ownership of the
particular NFT to be transferred to others. Recently, tokenization
has been heralded as the "future of Canada's digital
economy" with "the potential to unlock immense value and
liquidity for many investors".3
NFTs and tokenization
NFTs are a type of digital asset. They identify an asset such
that the asset, or a fraction of the asset, can be held and
transferred on a blockchain. An NFT can be used to certify
ownership over an asset that exists in the "real" world
or it can be a digital asset. In either case, the asset is
