Under FEMA’s software and intellectual property laws, NFTs can be classified as intangible assets. Because of their digital nature, NFTs can be stored anywhere, which makes their tracking and enforcement of laws quite difficult. Smart contracts mostly operate automatically when a predefined set of conditions are met with. Smart contracts are what govern NFT sales - making the transaction ambiguous and out of the ambit for most existing laws. The nature of NFTs and the lack of laws around it yet, seem to leave NFTs in something of a regulatory blind spot.

Source: The Hindu January 09, 2022 16:37 UTC