Strategy & Practice Management
Research Report Examines Surprising Rules Governing Metaverse Projects
A research report released by veteran financial services lawyer James A. Murphy shines light on the complicated – and often lengthy – Terms of Service agreements that govern participation and investment in metaverse platforms.
These digital universes have exploded in popularity in recent years, and attracted significant investment from Fortune 500 companies, investment funds and millions of individual gamers, MetaLawMan expounded in a media release.
The report, "Metaverse Much? Better Read the Fine Print," found over 140 English-language metaverse projects as of August 2022, with 82 of those metaverses making Terms of Service available upon logging in. Among the findings that may surprise participants in the metaverse are terms affecting the ownership and sale of certain assets, indemnification provisions and arbitration agreements, limits on the damages recoverable from metaverse operators, the ability of operators to change Terms of Service at any time, and the number of commissions payable to metaverse operators upon the sale of specific assets.
The release of the report comes in conjunction with the launch of MetaLawMan, a source of objective content and commentary on legal and business issues arising in the metaverse. The name will also represent Murphy's digital persona on metaverse-related issues on social media channels.
"Businesses entering the metaverse, investors and gamers should all be able to commit their time and money to a metaverse without running the risk of having their accounts terminated with no notice and for no reason," Murphy said. "We hope this report will encourage a voluntary migration toward a more balanced approach to Terms of Service that fairly takes into consideration the interests of both the metaverse operators and all their constituent users."
Prior to the launch of MetaLawMan, Murphy spent three decades as a practicing securities lawyer, including 11 years at Murphy & McGonigle, a financial services boutique law firm he co-founded and chaired. Under his leadership, the firm grew rapidly, attracting elite talent from the SEC, CFTC and U.S. Department of Justice and was named 2021's "Law Firm of the Year" for Securities Regulation by U.S. News - Best Lawyers' "Best Law Firms." Shortly after Murphy retired from the firm at the end of 2021 to pursue his interests in the metaverse, the firm was acquired by an Am Law 100 firm.
"As the leader of a top financial services law firm, I was fortunate to have exposure early on to the enormous possibilities created by emerging technologies, like blockchain, which is fundamental to the metaverse," Murphy said. "I am convinced that the development of the metaverse will be profoundly important for humanity, and I hope to contribute my voice to the debates that need to happen to establish a solid foundation for a flourishing metaverse."
"Metaverse Much? Better Read the Fine Print" is the first in a series of research reports to be released by MetaLawMan examining legal and business issues arising in the metaverse.
The full report may be accessed here.
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