How to Legally Protect Yourself as an NFT Artist with Nuzayra Haque-Shah

Spotify Podcast Episode: How to Legally Protect Yourself as an NFT Artist with Nuzayra Haque-Shah

In episode 5 of Freedom with NFT’s, our guest Nuzayra Haque-Shah shares with us how to legally protect yourself as an artist.

In this episode of Freedom with NFT’s Nuzayra Haque-Shah shares with us:

  • How to protect your original content and branding legally
  • What is timestamping in blockchain?
  • Copyright ownership
  • Taxes in the NFT space
  • Legal entity for trading

About Nuzayra Haque-Shah:

Nuzayra Haque-Shah is a founder, investor and an award-winning intellectual property attorney based out of Los Angeles, California. Nuzayra counsels U.S. and international clients on trademarks and copyrights, branding strategies, IP portfolio management, trade secrets, data protection, GDPR and U.S privacy law compliance and other commercial matters.

As a creative entrepreneur and small business owner herself, Nuzayra loves working with startups and creatives and has represented clients in blockchain, online coaching, cannabis, technology, design, fashion and entertainment industries.

One of the first attorneys to successfully obtain federal trademark protection in the cannabis industry, Nuzayra was named in the Daily Journal‘s ‘Top Women Attorneys’ for 2017. Since 2015, she has been recognized as a Super Lawyers Rising Star in Southern California for intellectual property, an award made to only 2.5% of attorneys in the region.

In this episode of Freedom with NFTs, we talked about leveraging your intellectual property.

[00:00:00] Lauren Turton: Buckle up for today’s episode of freedom with NFTs, our guest is Nuzayra Haque-Shah, and she’s the founder investor and an award-winning intellectual property attorney based out of Los Angeles, California. Nuzayra counsels US and international clients on trademark and copywrite, branding strategies, IP portfolio management, trade secrets, data protection, GDPR, and US privacy law compliance, and other commercial matters as a creative entrepreneur and small business owner herself Nuzayra loves working with startups and creatives and has represented clients in the blockchain, online coaching, cannabis, technology, design, fashion, and entertainment industry.

One of the first attorneys to successfully obtain federal trademark protection in the cannabis industry and Nuzayra was named on a daily women’s journal top women attorneys for 2017, since 2015, she has been recognized as a super lawyers rising star in Southern California for intellectual property and award made only 2.5% attorneys in the region.

She is often featured in legal and business outlets as an expert in intellectual property. Her latest interview on intellectual property rights for cannabis brands was published on Yahoo finance, and she just wrapped up as the keynote speech at the small business expo 2020. She had previously served on the board of directors of the south Asian bar association of Southern California.

Nuzayra holds the honor of being both a California attorney and a barrister in England and Wales having been called to the bar at Lincoln’s Inn in London. She attended the university of Southern California’s school of law, where she was awarded the Dean’s merit scholarship. In the UK she received law degrees from BPP law school in Leeds, in Northumbria university, graduating with honors in new castle. During her spare time Nuzayra loves hanging out with her husband and their pet cat Kiba or entertaining friends and family.

As a virtual attorney, she loves traveling to new countries and exploring new destinations while working for the protection and growth of her client’s business. It’s an honor to have you on freedom with NFTs, Nuzayra welcome.

So tell us, I’m so curious to know about your journey as a lawyer into the NFT space.

[00:01:21] Nuzayra Haque-Shah: Hi, Lauren. I’m so excited to be here today with you. And yeah, I would love to tell you about my journey into the NFT space. It happened by accident. I wasn’t really even familiar with the NFT space that much, or even when blockchain technology was coming out and people were talking about blockchain. I was like a lot of other people that thought blockchain means Bitcoin and that’s it. That’s all I knew. And I obviously stand corrected. Blockchain is so much more than just Bitcoin or cryptocurrencies.

And the way I got into this space was because one of my clients, so I’m an IP attorney and I deal with a lot of original content and original branding and I help my clients protect their content and monetize it and scale it. So that’s kind of part of what I do. So one of my clients who is a digital artist, I cannot reveal his name due to confidentiality reasons, but he’s a digital artist and he was doing really well. So we were working on a lot of his art pieces, getting them copyrighted. When he was getting ready for sale or you’ve been exhibiting them, we would do all of the copyrights before that.

So one day he scheduled a call with me and he said, I’m thinking of turning one of my artworks into an NFT and I was like, what? What is he doing? What’s he talking about? So that was my intro into NFTs was one of my clients who came up to me and said, I want to do this. And I want to do this right. Because he already knew the value of his artwork from beforehand even before this world of NFTs. He was smart enough to understand that, okay, this is just a different way of getting my art out there and getting more people involved in my community and raising the value, both social and monetary value of my artwork in a digital space. And I want to do it right. And that’s how it all started for me.

So I started advising him and doing my own research. And what was interesting was there’s not a lot of precedent or regulations out there. And this, we were talking about this, this was last year, I think, early last year that when we were talking about this, and so there was nothing, I was literally trying to Google.

Because if there’s a lawyer listening to this, you know that anytime we have to look up things, we will go on Westlaw or Lexis. But for this, there was nothing. So yeah, I started to Google and there were some articles here and there, but a lot of it came down to just applying the current laws to this new world.

So yeah, that was my intro into this world.

[00:02:53] Lauren Turton: Wow. That is amazing. And when I think about the timeline that you said, you got into this space. Just a year ago and just a year ago, there were no references or experience in the law space in NFT. So thank you for diving in support this community in regards to protecting themselves legally when it comes to NFTs.

So tell us from your point of view, from a lawyers point of view, explain what an NFT is.

[00:03:12] Nuzayra Haque-Shah: That’s such a great question. So the easiest way to understand what an NFT is that it is a digital contract between, you, the buyer and the owner of whatever editor you’re buying. So it could be an artwork, a piece of music, but it’s a contract between you and that seller.

And that contract is not a physical piece of paper. That contract is on the blockchain. And what the contract is saying, is you, because you’re purchasing. This portion of the artwork. You are one of the few people in the world that can claim that you own a piece of this original artwork for example, that is the easiest way to understand an NFT without getting into the whole description of it’s a non fungible token, which it is.

And a lot of people will explain that, but from a very basic legal point of view, this is what it is. It’s a digital contract. And the contract, the we, it is backed up just like in the physical world, you would have contracts where two people will sign the contract and it is based on trust. It’s the same way.

Instead, there’s not two people signing a contract, shaking their hand and saying, okay, here is our trust. But that trust is basically maintained by the blockchain technology that everything you do, every transaction you make, everything is timescale. So that is your trust that you’re putting in the seller, who you are trusting with your money, your resources, and you’re buying a piece of their creation. Now that creation could be anything, that is.

[00:04:05] Lauren Turton: Nuzayra dig into that a little bit for people who are new to NFTs. When you say that it can be anything, what do you mean?

[00:04:10] Nuzayra Haque-Shah: So right now, when we think of NFTs, we mostly think of artwork.

It’s the easiest NFT to explain an artwork is something that you can see it’s in a way tangible, and you can own a piece of it, but an NFT can literally be anything that you create. I feel with blockchain technology and even with the world of NFT we’ve only scratched the surface. So you’ve got your artwork, but if you are a musician, Your music.

And I know a lot of artists have already started doing that. They’re uploading their music and you can buy parts of their music as NFTS. So the music is one. Then we’ve got just in the real world. A lot of people like to own rights to designs, very unique designs. It’s not necessarily. You can call it artwork but if you think about Canva and if Canva creates these unique templates, okay.

And they’ve put it up on the blockchain technology and they say only the first hundred people can grab this template, that’s it. And it’s a very simplistic way of thinking about it, but you, as one of the very few hundred people can grab that template and then make it your own, but only you will have it. No one else will have that template.

No one else can use it. So the potential is pretty much limitless. Anything that you can think that, okay, you can create. You can bring that out into an NFT form. And if you are so inclined, if you are the creator or the author, that you want to give people a part of the ownership you can do so, and right now artwork is the most popular type of NFT, but I’m pretty sure we’re going to see a lot of different types of original creations coming out.

[00:05:33] Lauren Turton: And when you say creations, naturally, we go towards the creative space, but it’s not just creations, it is also deeds, wills, real estate, things in that space are also in the NFT world. So for anyone who’s new here to NFT is also open up your mind to, it’s not just the creative space, this community, this technology runs so, so deep, and there are so many ways to get involved in it.

There’s something that you said earlier, that was also interesting to me that I want you to dig in a little bit deeper too. You said timestamping, can you talk a little bit more about that? Because I know those who are new to the NFT space, they don’t know what that means.

[00:06:18] Nuzayra Haque-Shah: Right. So, and again, I’m going to try to articulate it a very simple way, because even when I was first learning about this, it’s like, oh my God, it’s difficult to even understand.

So the way blockchain technology works. And I’m not going to get into the technical part of it, but basically any kind of transaction you make is what we understand as timestamping in the real world, is that okay, someone literally takes a hot seal places it on a piece of paper. And there you go. It’s timestamped in the same way in the digital space, everything you’re making a transaction, any kind of transaction and the transaction necessarily doesn’t have to be literally just buying and selling. I think in the blockchain technology, any kind of interactional.

So you’re doing can be termed technically as a transaction, but anytime that’s happening, the real time is recorded. At what time is this happened. So in order for you to track something, authenticity it’s in a way, a lot easier to do that then in the real world, because in the real world, you have to go through piles of paper to find out okay, where this originated from.

Is this real, how many owners were there, but in the digital space, at least with blockchain, what timestamping essentially means in a very simple term, is that there was a record of every move being made on that blockchain. So if someone wants to go and verify, they can do that very easily because there’s an actual record of all of the moves that was made, including financial transactions, including any other kinds of transactions.

So that’s one of the easiest ways to understand. And you mentioned something that is so interesting that, you know, real estate, wheels and trust. And that is true. It’s actually happening up to space right now. There’s actual virtual real estate base that is up for sale. If you want to buy a piece of property in Manhattan, you might not be able to do that in the real world, but there’s a company out of Silicon valley. that let you buy pieces of real estate, but in the virtual world that’s your NFT.

[00:08:18] Lauren Turton: So why would someone want to buy a piece of real estate in the virtual?

[00:08:21] Nuzayra Haque-Shah: That’s such a great question. So I think the way the whole NFT world is set up is it’s a perceived value. So any kind of artwork, even if you think in the real world, like if you look at a Picasso.

What does it do for you? It has actually no utility, it’s oil and paint and a canvas but society as a whole has come together and decided that this piece of artwork has tremendous value. We’re going to assign it a couple of millions of dollars as value, but it’s because us as a society came together and decided to give it that value.

If one day we wake up and we just go, you know what, this is nothing. This is paper with oil and paid that I get to hang on my wall. What is it doing for me? It doesn’t pay my bills. Doesn’t feed me. It doesn’t have anything. So it has zero value that PIcasso painting can overnight go into the negative.

People who have ever bought Picasso paintings could now be sitting on a large pile of loss. That’s it. So in the same way, the whole concept with NFTs is that the community comes together for NFTs and decides this particular artwork for example, or even this particular real estate has value. And that’s the same concept with owning virtual real estate.

It is still finite. It’s not infinite. Like if you’re trying to buy property, even on the virtual work say in Manhattan, you were going to probably have hundred to 500 NFTs that can be purchased. So just like in the real world, there’s scarcity, just because you can buy it in the virtual world doesn’t mean everyone can go and buy it.

There is a price set. There is a limited number of people that can have access to it. So there is inherent value, but yeah, if you ask what does it do in the real world. Nothing much. You actually cannot go and knock on the door of that Manhattan property in real life and say, hey, guess what? I own this, no, you can’t do any of that, but in the metaverse, so to speak, you now own a very expensive piece of real estate.

[00:09:39] Lauren Turton: Yeah, absolutely amazing. I want to shift gears now and go into the space of NFTs from the viewpoint of an artist. I know a lot of people when they’re getting in into this space, it’s because they have created artwork. They might be a photographer, a painter, a digital artist. So let’s talk about when minting an NFT what do artists need to be thinking about from a legal point of view.

[00:10:07] Nuzayra Haque-Shah: Great question. So I know that a lot of artists now, especially in the NFT space, unlike my client, who’s actually really smart, but a lot of artists, they’re not thinking long-term, they’re thinking more in the sense of we are going to mint these NFTs, put them up for sale, make some quick cash. All of that.

Because this is a new world and people are still navigating it, very soon the real world is going to catch up to this virtual world. In the real world you as an artist, if you want to sell your art or you want to give even licensing rights to someone else in order for them to sell your art, you first have to own the artwork.

Now under copyright law, which will apply to NFTs because NFT is essentially is a mix of cryptocurrency and intellectual property. That’s what it is. It’s like these two came together, had a baby, and then that was NFTs. So in the real world, if you are an artist who always want to think about ownership, same with the virtual world who created this art and who owns the art.

If there are multiple people that contributed in making this art, what it is, the final product, then there’s multiple owners of this art. So who has the right to actually put it up for sale to distribute it, to display it. All of this has to be figured out before an artwork can actually go to the market place in the real world. So that the same principles applied to the virtual world is nothing different. So as an artist, if you are minting NFTs, and if you are thinking of doing it, I would say, first of all, when you create your digital artwork, the first thing you want to do is ensure that you have the rights to ownership.

So, if you were the only one that made this artwork, you are the copyright owner. However, you should go register that copyright with the US copyright office and get a beautiful certificate that says you’re the true owner. And then you, as the owner have all the rights, you can display it, you can make derivatives out of it.

You can sell it, get the license, you do whatever you want to do with it. And if anyone else wants to take your artwork and do something with it, they need your permission. So that’s what happens in the real world. And also if there are multiple people that got together, say if it’s a part of a project and there’s a lot of people involved, it all contributed in making this artwork that the final product.

Then right now, every person that made a contribution, legally speaking, they own the copyrights to that particular contribution they made to the artwork. So you have all these different copywrite owners. So, what you would want to do is if you’re the main artists and you hired all these people, you brought all of them together.

You want to have transfer agreements, copyright transfer agreements that transfers all of their rights over to you. So when you put up your artwork on opensea or wherever you want to put it up on, you control the commercial aspect of that NFT you’re not going to have Bob and Michael and Harry and Peter coming up to you and saying, hey, guess what?

I did this. And I did that. So there’s all this money that you made after selling this NFT, you owe us portion of that profit because we never gave you the rights. Yeah. You paid us for our work, but we never transferred the rights to you. So this happens in the real world, but this could very easily happen on the NFT space.

Like nothing is stopping that from happening. And in fact it will happen when this space blows up a bit more. This is bound to happen. So as an artist, I would be mindful of those things that you need to be the proper copyright owner, and then only then can you confidently put up your artwork and sell it, make money off of it and give people permission.

So this is also another legal angle that when people are buying NFTs as we said earlier, it’s a digital contract. You were promising these people that this is authentic. The ownership is verified. There is no third-party claims to it. So when they’re buying your NFTs, that’s why it has that value. However, just like the real world, if there are third-party rights, if other people are paving ownership in that NFT, It doesn’t hold much value because this person now doesn’t even know any more if this NFT is even valid.

If there’s 10 other owners to it and this person never knew, they thought, okay, I’m just buying from Bob, but now 10 other people are showing up. What is the value really of your IP? It’s not there anymore. So your whole career can come crashing down because you’re now potentially you’re a fraud.

You defrauded people out of all this money, and now you’re telling them, sorry, you guys actually don’t own the rights to it.

[00:13:40] Lauren Turton: Is it expensive to go through this process. Walk us through what that looks like.

[00:13:42] Nuzayra Haque-Shah: Yeah. So the process itself is not as intense as it is say if you were getting a trademark, it’s a lot more intense, with copyrights you have to go to the very practical step by step is you will go to the copyright.gov, which is their official website.

It’s governed by the library of Congress. You will log in, create an account. And you will follow step by step for like what the instructions are. They’ll ask for information, all of this information that I just mentioned, who is the owner who created this artwork? How many creators were there? If there are multiple creators, do you have a contract from them transferring over the rights, all of that, they will verify they will want to see the artwork. What date was it created? The date it was first published. They’re going to check all of them. And then they’re going to give you the registration, only if they think your artwork is unique enough though. So that’s also the catch.

If your artwork is like a derivative of something that is super common, you might not get the copyrights to it because they’ll say what’s so unique about this. You don’t, you can’t get a copyright ownership over something that is so generic. So that’s also something to keep in mind, but then again, Why would you even bother putting up something super generic as up as an NFT.

It’s not going to have that value.

[00:14:25] Lauren Turton: Absolutely. And then is there a fee associated with this?

[00:14:26] Nuzayra Haque-Shah: Yeah, so the filing fees right now, I believe to the artwork is about $65 for our application. So it’s not much it’s something that is easily accessible. And artists should just get it done before the launch their artwork in the marketplace.

[00:14:37] Lauren Turton: And I know your job as a lawyer is to look at all of the risks that could happen and do all of the steps to eliminate the risks and to protect yourself. I truly believe that as the space grows, people are going to come in from these different viewpoints that artists or creators aren’t necessarily looking at and saying, I know law, I know what I can go out to people for.

So this episode is very helpful because you’re telling us right now, go out there, copyright your work, take these extra steps, pay that fee so that as your career in the NFT community explodes, you are protected from the beginning.

[00:15:03] Nuzayra Haque-Shah: Yeah. And you are someone that can be trusted. People will have immense trust in you if they know that you know what you need to do in order to protect your artwork, it’s almost like protecting the community as well.

Because if that artwork is disputed, the ownership is disputed. The whole community is kind of left, feeling lost and confused because there’s no value or the value is now disputed. The other saying, which is important to know is that this is something that my husband asked me the other day. He said, well, say, for example, if I see are really cool NFT and I want to create something like that, what’s stopping me from creating my own version of something that I saw, which was really cool.

And putting it up as an NFT and I said, well, that is where copyright law comes in because yes, technically there is nothing stopping you. However, if you are a copyright owner, a registered copyright owner, you have the rights to create derivatives of your artwork. Nobody else. So if, for example, a few days ago there was that meme and I posted about it on my story.

So that was so interesting, this little girl that made that face, where she was annoyed and it was a viral meme, then meme had gone viral and everyone loved it. So that is now being sold as an NFT and this little kid is going to be a millionaire so good for her. But if someone sees that and says, okay, what if look at that’s the photograph.

That’s a 2d photograph. What if I create like a graphic art version of this and I had made that into an NFT. Someone can. However, if that girl’s parents were smart enough to register that picture as a copyright, or even without registering, you have those rights, but you just have to know how to enforce it.

They can then go after those people and say, hey, you cannot create derivatives out of this. As we own the rights to it. So, if you can even shut down those kinds of NFTs, that will pop up, try to piggyback off of more popular NFTs. So what that does is it protects your control, the control you have over the marketplace with your artwork, plus it protects your community because they know that this is the only place where I can come and get an original, whatever your name is.

That no one else in the space can treat derivatives or make different versions of it and sell it. This is the only place where it can happen. And therefore, my NFT is so valuable.

[00:16:25] Lauren Turton: Wow. Very powerful information. Something that I know gets a little bit leery in this space when people are first entering is okay, I’m an artist, I’m a creator. I am turning it into my work into an NFT and I’m selling it to someone else. Do I still have ownership over the NFT? Can you dig into that a little bit for us?

[00:16:38] Nuzayra Haque-Shah: So, yes, technically. You would have rights over the original piece, but obviously when you are turning that into an NFT and people have already purchased, they have bought a piece of your artwork depending on what kind of terms and conditions there are on the hosting platform.

It can make a difference. So if the hosting platform has some, a clause in there, which says the original artists reserves the right to revoke all NFTs, which would be really bad for the people that bought it, but say, if they have a clause like that, then you as an artist know that, okay, if one day I decide that I want to just wrap up everything.

I don’t want anything of my artwork on the internet anymore anywhere then yeah, you can do so. But I would say it would be very hard practically to enforce something like that. So you need to be very clear that when you’re turning your artwork into an NFT, that you’re fully committed to it. It’s the same thing as buying stocks.

If you buying stocks in a company and then the company goes bankrupt, for example, the company’s gone, your stocks have no value anymore. Imagine the devastation people feel and the kind of even negative association they have with that company or anything that company does that over never trusting that company again, never giving them our money, not buying their stocks is the same with the NFT space.

If you as an artist, are not performing well, or your reputation gets scarred or something happens by the value of your NFT drops. Yes. You still have ownership over it, but people have still purchased from you. So at that point, it’s going to be very hard for you to go to demonstrate return all of this.

Like you own nothing, you know, you own absolutely nothing from my artwork anymore. I changed my mind. Just like that would be crazy unless realistically, you decide to buy back all of your NFTs at the current market price.

[00:17:45] Lauren Turton: Okay. That sounds like a lot of drama and a lot of hassle and something that we don’t want to happen to us, which takes us into how can artists actually stay protected in regards to the platform they are selling their work on. Now we understand what to do at the beginning, get your work copyrighted. Now you can turn it into an NFT on the various platforms that are out there, but how do I actually see protected when doing that?

[00:18:02] Nuzayra Haque-Shah: That’s such a great question. So it’s like putting up your work on any other social media platform. If you think about it. You have to read the terms of use, the terms and conditions of each platform, they are going to have different rules and regulations. If when you like for example, if you are putting up any of your pictures, videos like we do on Instagram, on Facebook, you’re essentially giving up your copyrights.

You are agreeing to the fact that as soon as you hit that upload button, now all of this is owned by Instagram and Facebook. So you don’t have any control over it. That’s why when there’s an infringement online, people will not necessarily knock on your door and say, Hey Lauren, can you just bring down that picture?

That’s not allowed. It’s my picture. And they’ll just go straight to Facebook and file an IP violation. Because now they own the property. They own the intellectual property to those. It’s the same way for NFTs. All of these different platforms are coming up, opensea, obviously being the most popular, one of them, would you read through their terms of use. What do they say? If there is a section that says by uploading your content, your artwork here and minting with NFT. You give us the rights to the may derivatives out of it. Display and sell it. What they’re saying, essentially with which they don’t want to obviously say directly is you’re giving up your copyrights to us.

We now own the rights to it, and we get to decide what we want to do with it. So if you go inactive, for example, as an artist and your community’s dead, the platform, depending on their terms of views could just bring it under their control. They start running it. These are creating derivatives of it. So it technically, they make the community believe that this is very much alive and this is very much still going on, even though the original artist is not there, but who needs them anyway, you can make a 3d version of that and just show them the metaverse like I don’t see how that would even not happen.

Like from a business standpoint, if I had a platform like that, those are the kinds of rules I would set just to make sure that there’s stability. Like one day, I don’t want to wake up and see all of my best artists are gone. They’ve moved on to another platform.

So in order to protect myself as the platform owner, I would say I would want some rights of theirs. So they’re kind of tied to the platform, just don’t get up and leave, but yeah, definitely check the terms of use and decide accordingly, because this is a new space. There’s limited number of platforms, but I’m sure as time goes on and as more people come into this industry, you’re going to have competition.

There’s going to be different platforms which might offer even better terms of use.

[00:19:37] Lauren Turton: Thank you so much for that insight. Now I want to switch gears and talk about taxes in the NFTs space. I know for me, this is very overwhelming. It’s a lot of terms that I don’t understand when people are talking about it. So who can break down in the simplest terms, how taxes in the NFT space work.

[00:19:49] Nuzayra Haque-Shah: So that’s a great question. I am not a tax lawyer, so I’m going to make my comments very brief. I highly recommend people that you speak to a tax attorney or a CPA with experience in the cryptocurrency world, because it’s the wild west. But what I would say is when you think about NFTS, think about it in the same way, as you would think about stocks and shares for now, there are no specific regulations that the IRS has come up with yet, but logically speaking, that’s how they’re going to treat it.

It’s an asset that you can trade. So just for stocks and shares, if you sell within the first year of, you know, buying a piece of stock, you are taxed higher on as capital gains tax. If you sell the next year, the taxes are kind of lower. I would say, think of it the same way, because it is essentially, or the IRS, it will be the same thing. These are assets that you can trade. And also I saw online, another lawyer was saying that his clients actually did get hit with a tax bill from the IRS. Because of heavy trading cryptocurrency, not necessarily that they were buying NFTs, but they were buying and selling cryptocurrencies and they made a lot of money, which was good for them.

But then the IRS did audit them. So the IRS is going to catch up. So I would say, definitely speak to a tax attorney for that.

[00:20:37] Lauren Turton: And it’s best when starting anything to start under the lens of I’m going to do this in the right way from the beginning, so that as you move and grow in a space you’re protected. You’re fine.

So again, this episode is so, so important because you’re sharing what people need to take action on now. Everyone who’s in the NFT space, this is the beginning. Just the beginning. It says if the internet just came out, I’m one of the first people who are part of the internet. So I’m so glad that we could have you on today to share these insights from a legal point of view.

I’m curious in the NFT space, should people be setting up a legal entity for trading?

[00:21:01] Nuzayra Haque-Shah: You know, it depends. It really depends. If you are going to be actively trading on NFTs. And that is going to be your source of income. Like that’s how you see it. It’s not a hobby. It’s not something you do sometimes as this is your source of income, then yes.

Then set up an LLC. Because if that’s your main source of income, you are essentially a business owner that is your business. It’s almost like bringing everything back to the real world. Like if you look at it from a very simple lens, that is what it is. If you’re doing this fulltime, that’s your business. As a business, you always want to separate your business from your personal assets, because if you get sued because of your business activities, and you get sued as an individual, whoever is suing you, can go after your house, your spouses accounts, New York kids college fund, whatever you have as your personal assets, they can go after all of it. So if you’re going to be doing this at a high level, where this is seriously, you’re making good amount of money from trading NFTs then yeah. Set up an LLC and do the trading through that company.

Not as you as an individual and then cut yourself a paycheck, just like any company would do, cut yourself a paycheck and you get the paycheck on the companies. So if the company gets sude, the company gets sued and your personal assets are protected and also all of the assets that you’re buying.=, So any NFT your purchase is an asset.

All of that can be under the company’s name as well. So you can even get insurance for it.

[00:21:53] Lauren Turton: Oh.

[00:21:53] Nuzayra Haque-Shah: Well, yeah, if these are high value NFTs, if it’s like one of those apes, for example, if you own one of those bored apes like does are so expensive, like imagine just leaving them out, vulnerable out there.

No, you might want to even think of getting insurance for all of this. If there is ever in digital kind of step, like if your system gets hacked, something happens. I know right now the blockchain technology is extremely secure. However, things can go wrong. And you’re supposed to write down all your information on a piece of paper and not share it with anyone.

But what if, you know, someone steals that piece of paper that has all of your information and hacks into your system. For those, you can get insurance as a business, you can get insurance. Then also as an artist, you want to think about, okay, if I’m going to be doing this very seriously, not as a buyer, but even as an artist that I’m going to put up my artwork, I’m going to be creating a whole brand like bored ape, or like, crypto kitty.

So, yeah, like all of these are brand names now they’re not even just random things you see on the internet. No, they have actual value and in the millions, so, and the value is associated with their brand identity. You see a bored apes if you know, oh my God, this is really valuable. Same with the kitties, same with all of the other bored but no, there’s one Panda coming up as well.

I think they’re also trying to call it bored pandas, but this is the point like if someone is trying to piggyback off of your success and creating their versions, it could be like, okay, from bored apes, someone’s trying to make bored pandas. If you think about it, even that said, these are your brand needs, these are your trademarks.

These are your assets. You want to protect them and you want to protect them under your company’s umbrella. So it’s a proper business and you can get IP insurance for all of them. If they’re safe, they’re secure and you can treat them properly.

[00:23:30] Lauren Turton: Okay, thank you. Nuzayra. This has been such an insightful and helpful episode on freedom with NFTs.

Before we wrap this up, are there any last words that you’d like to share with our audience today from the legal standpoint of NFTs?

[00:23:49] Nuzayra Haque-Shah: I would say that be smart about this. It’s a brand new world and it’s not going away anywhere. I know a lot of people say, oh, this could be a phase and this could be just, you know, something that’s happening temporarily.

I don’t see it that way. I think that as we move on with time, it’s only going to get bigger and more and more tiers are going to come into this industry and major corporations that already started coming in. So whenever there’s a new space, it’s unregulated and there’s a lot of confusion, however, whatever you would do in the real world to protect yourself, make sure that you are safe.

You are making money properly. You’re being taxed properly or your not being world, taxes for no reason. All of those steps that you would take in the real world, just take those same steps in this woman, in the metaverse. Very soon there’s going to be very little difference between the real world and the metaverse.

So just behave as if you were in the real world.

[00:24:31] Lauren Turton: Thank you so so much. And tell us, how can our audience get in touch with you.

[00:24:34] Nuzayra Haque-Shah: Absolutely. So you can find me on Instagram, on Facebook. My handle is @nuzayraesq and my website is nhlegal.net.

So @nuzayraesq all across all of the social media platforms, even on clubhouse.

[00:24:44] Lauren Turton: Awesome. We will link that in the show notes again, Nuzayra. Thank you so much for all of your insights and wisdom, and this won’t be the last time that we see you on freedom with NTS. I guarantee I will have you back on as a guest.

Thank you so much.

[00:24:53] Nuzayra Haque-Shah: Thank you.

Connect with Nuzayra Haque-Shah:

Instagram: https://www.instagram.com/nuzayraesq/

Facebook: https://www.facebook.com/pg/nuzayraesq/videos/

Website: https://www.nhlegal.net/

Connect with your host, Lauren Turton:

Twitter: https://twitter.com/LaurenTurton_

Facebook: https://www.facebook.com/thelaurenturton

Instagram: https://www.instagram.com/laurenturton/

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