The Legal Conundrums Of The Metaverse

The metaverse has gained momentum after the CEO of the biggest social media organization made a statement that the ‘metaverse’ would be the next big thing after the Internet. Although there is no single, agreed upon definition of the metaverse, the common understanding of the metaverse is that the concept combines IoT, AR, VR, XR, and 3D technologies. The market capital and other economic potential of the metaverse is enormous. The market cap was calculated around USD14.8 trillion as of October 2021 while the economic potential ranged from USD3.75 trillion to USD12.5 trillion. Hence, it is of importance to discuss the legal implications of the metaverse. This article is the first to elaborate the legal conundrums of the metaverse in a proper manner. It includes discussion of general and property law and intellectual property law, and whether the time has come to have “a virtual property law.†It also discusses some other legal issues such as privacy and data protection, contract law, including smart contracts, cybersecurity and cyberattacks, monetary and payment systems laws, and regulation of virtual assets (including securities and commodities laws), tax law, anti-money laundering laws and KYC, and criminal law. From a legal perspective, theoretical views on the three waves of technological disruptions to the authority of the law and the demand for respect for the rule of law suggests that the metaverse falls into the first wave of disruption - it creates a space where the law of the real world may be difficult to apply. Therefore, the metaverse disrupts the “traditional claims†from the legal authority and the demand for respect for the rule of law just because it is the law. However, applying this subset of the real-world laws to the metaverse turns out to be possible, but with limitations. Such limitations arise specifically when it comes to the operation of the law.