Lawyer Monthly - June 2022

understands NFTs and Web3 prior to making a purchase. It also helps if your legal counsel has an art law practice and understands the fine art marketplace equally, such as Mazzola Lindstrom LLP. As a consumer, the best way to protect yourself is to do your own research. The best way to do this is through learning about the NFT space and interacting with the NFT community through inperson events and specifically on Twitter and Instagram. Do not be afraid to ask questions. Very few people have been involved with NFTs for more than a year at this point and even the true “veterans” have only been in the NFT space since 2017 at the earliest. While there are risks out there, the NFT community is very helpful, welcoming and quick to identify unscrupulous behaviour. Regarding NFT projects themselves, you need to pick a certain risk tolerance and adhere to it. You may see people buying an NFT for 2 ETH (about $6,000) and selling for 30 ETH (about $180,000). That is not typical. The key is to become educated and mitigate your risk tolerance by being consistent and not getting too caught up in the hype. As an attorney I lean towards being riskaverse, but I have personally begun to collect NFTs for their artistic value and to support my favorite artists and projects. My suggestion is to make sure that you know the artists and leaders behind a project before investing in it. What additional security measures should one consider to ensure their digital wallet is safe and their NFT portfolio is protected? If you are lucky enough to own NFTs that are hundreds of thousands or even millions of dollars, my best piece of advice is to contact Appraisal Bureau and have your NFTs appraised, insured by Lloyds of London, and stored on a Ballet wallet in a secure vault with Malca-Amit. Caroline Taylor of Appraisal Bureau is currently the only fine art appraiser who has developed a proprietary method to appraise NFTs and Lloyds of London requires that all NFTs use her method for appraisal before they will insure the NFTs. Once insured by Lloyds of London, your NFT is then stored on a Ballet Card, which is a form of a cold wallet and physically stored in a vault by Malca-Amit. Currently, this is the only way to receive full liability insurance for your NFTs and, in my opinion, this is the best way to fully protect your NFTs. Kevin Kelly Kevin Kelly is an associate at Mazzola Lindstrom whose practice focuses on commercial litigation. Kevin represents domestic and international commercial businesses in arbitration or litigation on transactional matters, and has also worked on a variety of insurance matters including subrogation, coverage determinations, broker liability and handling bad faith claims. His practice also includes work on art law relating to NFTs, and he has experience advising on intellectual property rights and jurisdictional issues in this area. Mazzola Lindstrom LLP Mazzola Lindstrom LLP is a firm headquartered in New York City that provides legal services and serves as general counsel to a diverse array of clients domestically and internationally. Mazzola Lindstrom LLP’s lawyers practice in areas including commercial litigation, complex transactions, art law, employment law, credit risk and international trade, and insurance coverage and defence. WWW.LAWYER-MONTHLY.COM | JUN 2022 92 THOUGHT LEADER - KEVIN KELLY

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