Huang warns of rise in legal ambiguities as interest in non-fungible tokens skyrockets
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Cryptocurrencies have taken off — bitcoin’s value has jumped 400 per cent in the past year. And interest in non-fungible tokens (NFTs) — a digital token or digital collectible — exploded this year after an NFT representing a digital work by artist Beeple sold for $69.3m in an online auction at Christie’s in March. In essence, non-fungible tokens are lines of code, letters and numbers saved on the blockchain: an immutable register on a network of computers and also the digital ledger underpinning cryptocurrencies. With so much hype surrounding NFTs and digital tokenisation, investors may be wary of a bubble and a clampdown by global regulators. Allen Huang, associate professor of accounting at Hong Kong University of Science and Technology, warns that NFTs and digital tokens give rise to legal ambiguities. One question is which country taxes are payable in when an asset is held virtually on the internet.
Read the news article on Financial Times published on 14 May 2021
