A Comparative Study of the Legal Nature and Effects of Ownership of Non-Fungible Tokens (NFTs): A Comparison of Iran and the United States

Abstract

This article employs a descriptive-comparative method to examine comparatively the legal systems of Iran and the United States with respect to the legal nature and effects of ownership of non-fungible tokens (NFTs). The emergence of digital ownership has created numerous challenges for legal systems. Determining the legal status of digital assets, instability in transactions, difficulties in dispute resolution, the issuance of divergent judicial decisions by courts in different jurisdictions, proof and transfer of ownership, uncertainty concerning compensation for infringements of digital property rights, civil liability challenges arising from determining responsibility for harm caused to others by defective smart contracts, and the assessment of damages resulting from infringement of ownership rights over data or virtual items are among the principal legal challenges associated with NFT ownership in Iran and the United States. The findings indicate that, within the Iranian legal system, non-fungible tokens have not been expressly and specifically defined, and their current status remains within a legal gray area. No explicit and specific legislation governs NFTs. The principal challenge lies in reconciling the decentralized and cross-border characteristics of NFTs with domestic laws founded on territorial sovereignty and centralized institutions. Accordingly, analysis of their legal nature must rely on general legal principles and related legislation. The results further indicate that the absence of specific legislation regulating NFTs in Iran has resulted in a lack of legal clarity concerning matters such as ownership, transfer, taxation, and liabilities arising from related contracts. Domestic studies demonstrate that such ambiguities entail numerous legal risks, including fraud, infringement of intellectual property rights, and contractual disputes. In the United States, the legal approach to NFTs is more developed, although it remains incomplete. In this jurisdiction, NFTs are generally examined under existing laws governing securities, intellectual property, and smart contracts. Institutions such as the U.S. Securities and Exchange Commission (SEC), together with federal intellectual property laws, particularly those governing copyright and trademarks, play a regulatory role in NFT-related transactions. It is recommended that Iran enact specific legislation regulating NFTs, establish regulatory institutions for digital transactions, and reform existing intellectual property laws. In the United States, recommended measures may include harmonizing state and federal legislation, clarifying the legal definition and classification of NFTs, and strengthening regulatory frameworks governing NFT platforms.