The complete language of the historic Markets in Crypto Assets legislation has been finalized by the European Union. Although the text is still officially up for comments, insiders briefed on the negotiations have said that it has been finished.

The bill’s rules could even apply to some assets classified as NFTs, according to a leaked copy of the legislation dated Sept. 20. This is because the proposal asks EU enforcers to prioritize “content over form” when enforcing the law.

NFTs are theoretically excluded from the framework, which calls for platforms to register with the government, stablecoin issuers to keep capital, and issuers of crypto assets to publish white papers with technological roadmaps.

NFTs are typically created with a singular digital identifier that cannot be duplicated, swapped, or divided; however, the rise of fractionalized assets, in which a number of fungible tokens are created to represent a single NFT, has regulators concerned that they may resemble traditional securities.

While the leaked draft, which was worked out in a series of technical meetings after a June 30 agreement, shows MiCA doesn’t apply to NFTs that are truly unique and unable to be traded with each other, the [final] compromise text states in a Recital that “the issuance of crypto-assets as non-fungible tokens in a large series or collection should be considered as an indicator of their fungibility.”

A paragraph known as a Recital introduces an EU law and explains its purpose. A recital can be utilized by supervisors and judges to determine the scope of the law even though it is not legally binding, unlike the substantive articles of the regulation.

The provision’s specifics have raised questions in the sector. The precise wording used in the legislation’s formulation, such as comparable but different Bored Apes, which suggests that issuers and trading platforms would be subject to its requirements, could influence whether in fact, the regulation covers the majority of the NFT business.

National and EU regulators “should take a substance over form approach under which the features of the asset in question should decide the qualification, not its designation by the users” when deciding whether to regulate a specific asset, the text continued.