The Sandbox's Terms of Service Says You Don't Actually Own NFTs Associated With The Sandbox

While I've written about how The Sandbox's blockchain-based metaverse platform has a small user base despite (because of?) NFT sales from major brands, Indiana University associate law professor João Marinotti recently made an equally salient point -- you don't actually own the NFTs associated with The Sandbox:

If The Sandbox “reasonably believes” you engaged in any of the platform’s prohibited activities, which require subjective judgments about whether you interfered with others’ “enjoyment” of the platform, it may immediately suspend or terminate your user account and delete your NFT’s images and descriptions from its platform. It can do this without any notice or liability to you.

In fact, The Sandbox even claims the right in these cases to immediately confiscate any NFTs it deems you acquired as a result of the prohibited activities. How it would successfully confiscate blockchain-based NFTs is a technological mystery, but this raises further questions about the validity of what it calls virtual ownership.

The Conversation reached out to The Sandbox for comment but did not receive a response.

Much more here. I took the screengrab here from The Sandbox's Terms of Service, and the terms are as drastic as Marinotti describes them.

I don't necessarily blame The Sandbox for having such a drastic "in case of emergency break glass" clause to cover itself.

To test how many people actually read a product's Terms of Service, researchers created a fictitious social network and invited volunteers to sign up.

98% missed that its TOS had a clause that required them to give up their first-born child. #TILhttps://t.co/3zsdp1WINA

— Wagner James Au (@slhamlet) May 10, 2022

It reminds me somewhat of contentious changes over Second Life's Terms of Service, which over the years, have taken on quite a few qualifiers behind the "Your world, your imagination" motto.

That said, all this does undermine the idea that NFTs represent a new and important form of digital ownership. That might be the case, but when a real company with real investors gets involved, take a close look at the Terms of Service to see who really owns what. Then again, as Marinotti notes, a study suggests that 98% of people don't actually read the TOS that they agree to -- even when it includes a clause literally demanding your first-born child.

Comments

[Joey1058]

"How it would successfully confiscate blockchain-based NFTs is a technological mystery..."

If I remember the process correctly, they hold the private keys to your account, similar to the way an exchange like Coinbase does. This makes it easier to simply reverse the transaction, or more nefarious, just confiscate the item.