Law Prof | Conceptual Artist Brian Frye Takes On The SEC Over NFTs

Law360, NFT Artists Bring Preemptive SEC Suit To Protect Artwork:

Two NFT artists sued the U.S. Securities and Exchange Commission in Louisiana federal court on Monday to protect their forthcoming nonfungible token projects from a potential enforcement action, with the artwork itself seeking to highlight a perceived regulatory overreach into NFTs.

Law professor and conceptual artist Brian L. Frye and his co-plaintiff, musician Jonathan Mann, argued their respective projects face a "credible threat of enforcement" considering the regulator unveiled high-profile settlements with two NFT projects last year. Frye said the lawsuit is also part of his own "conceptual art" that seeks to make a point about the SEC's ability to regulate the tokens.

Frye, whose expertise is in intellectual property and art law at the University of Kentucky College of Law, told Law360 in an interview that he has an "unusual pairing of interests" in the intersection of securities law and conceptual art. Conceptual art, he explained, is "art about ideas," in which the idea behind a piece is the point of the art, with less emphasis on how it's executed.

Frye's upcoming work that the suit seeks to protect is a set of 10,320 NFTs called Cryptographic Tokens of Material Financial Benefit, which will be sold by the business entity he formed for the project, Securities Art LLC. The project's prospectus notes that it is "intended to illustrate the absurdity of the SEC's claim that it has the authority to regulate NFTs that represent ownership of artworks."

Law.com, Artists Sue SEC in Preemptive Lawsuit Over Whether NFTs Are Securities

Brian L. Frye (Kentucky), SEC No-Action Letter Request, 54 Creighton L. Rev. 537 (2021):

This article is a work of conceptual art in the form of a law review article. It argues that the sale of conceptual art violates the Securities Act of 1933. And it proposes to prove itself by requesting an SEC no-action letter holding that the sale of a work of conceptual art titled "SEC No-Action Letter Request" does not violate the securities laws.

Brian L. Frye (Kentucky), The Art of the Token, 5 Stan. J. Blockchain L. & Pol'y 238 (2022):

This essay reflects on my practice of creating conceptual art in the form of legal scholarship and selling it as NFTs. It consists of introductory reflections and descriptions of four conceptual art projects: SEC No-Action Letter Request 3: Securitized NFTs, The Securities Art LLC Non-Fungible Token Bond, Adopt a Design Patent: 1842-1925, and Andy Warhol’s Pantry Tokens.

Brian L. Frye (Kentucky), The Securities Art LLC Non-Fungible Token Bond:

This is a legal scholarship in the form of a prospectus for a bond offering titled "The Securities Art LLC Non-Fungible Token Bond." It purports to offer for sale to the public a series of bonds reflecting an investment in a confidential strategy for investing in non-fungible tokens. It is also a reflection on the ontology of securities and the SEC's failure to engage with that question.

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