On Wednesday 22 September we hosted a panel discussion on digitisation in luxury law assets at the 9th Luxury Law Summit at the British Museum. Our panel was chaired by commercial partner Eddie Powell, with family and art law partner Hetty Gleave, and financial services regulatory partner Kate Troup.
We were joined by Alastair McRobert, an investment manager at Vermeer Partners whose key theses for the luxury sector is the digitalisation of sales channels, and how this can drive both sales and margin growth, and Ankur Kacker, UK Digital Asset Leader in the Financial & Professional (FINPRO) Practice at Marsh JLT Specialty. Ankur is responsible for development of new insurance solutions for digital assets such as cryptocurrency. He works closely with the business's New York based Digital Asset Risk Transfer (DART) team, which offers risk transfer solutions to firms operating in the areas of blockchain, cryptocurrency, and digital assets.
NFTs are one of the latest developments in blockchain technology and they have taken the art world by storm with record-breaking sales of digital art in recent months. Each NFT is a unique token on a blockchain, but unlike crypto, they store extra information which provide collectors the opportunity to build a digital collection where each item can be traced back to the original issuer. Because of this, NFTs are increasingly used in applications that require unique digital items such as crypto art and digital collectibles.
With NFTs crossing boundaries between high fashion and esports and art NFTs selling for record amounts, we explored the following topics relating to luxury assets in our session:
- Is it a fad? Is it sustainable?
- Other than digital art, what kinds of asset could use NFTs?
- What are the risks in creating a digital asset for the creator or the brand?
- How do NFT’s and other digital assets derive value, and what risks are there to that value?
- Is it just for geeks or will corporate investors get involved?
- How easy are NFTs to insure, and how would you go about determining what is covered and assessing the risks associated with the asset?
- If you are looking to buy an NFT, perhaps a piece of digital art, on the secondary market, what are the risks you’re facing?
- How do we see regulation in this area developing?
We will be sharing the insights gathered from our session in the coming weeks.
We have particular expertise in helping clients structure their businesses to address the legal and regulatory concerns in this complex area. Our broad market knowledge enables us to provide clients with practical solutions and insights into current practice.
The Fladgate fintech team is made up of specialists in a variety of practice areas, including corporate, capital markets, financial regulatory, funds, commercial and data protection. Our fintech practice advises start-ups, established fintech companies, and financial institutions on matters including initial token offerings and initial coin offerings; cryptocurrency service providers; and the regulation of crypto-assets.