There are calls for a “legal precedent” after a “comical” NFT launch by a New Zealand man, although the Government says its not an area it regulates.
This comes after Kiwi man, Martin van Blerk, was revealed to be behind an NFT game called Pixelmon which raised $104m after selling NFTs.
But many investors said the artwork and hype around the game didn’t match the “comical” art reveal and feel ripped off.
“There needs to be a legal precedent set to prevent this from happening again,” said one Pixelmon online community member.
Van Blerk apologised for the art reveal, but said it was being improved and committed to making the game.
1News approached various Government agencies about this, and what people could do if they felt they had not been treated fairly when trading products like NFTs.
The minister for digital economy and communications, David Clark, said the Government did not regulate NFTs.
“However I note that cryptocurrencies, NFTs, and other emerging trends are being looked at internationally, and there are a number of different approaches being taken,” he said.
“We are watching this space.”
The Commerce Commission was responsible for enforcing the Fair Trading Act which prohibited traders from “engaging in misleading conduct and making unsubstantiated, false or misleading representations about the supply of goods or services”.
“We understand that NFTs are an emerging area, which we haven’t investigated and as such we do not have any specific guidance,” the commission says.
The Financial Markets Authority said it could not say if it was or wasn’t investigating Pixelmon.
“NFTs are an asset and – similar to gold – financial services or financial products can be provided in relation to this asset, which will be captured by financial regulation. However, the asset itself is not a regulated financial product,” a spokesperson said.
“If an NFT doesn’t represent a financial product or a financial service isn’t provided, it likely won’t fall within the FMA’s regulatory remit.”
But many cautioned investing in NFTs without doing proper research, with the FMA providing a list of tips.
1. Cryptocurrencies are high risk and highly volatile – the price can go up and down very quickly
2. They’re not regulated in New Zealand
3. If you want to purchase cryptocurrencies, then use an NZ based trading platform as this offers a minimum level of protection
4. NZ based trading platforms must be registered on the financial service providers register and belong to a dispute resolution scheme
5. Cryptocurrencies, crypto trading platforms and the people that use them are often the targets of hacking, online fraud and scams