The metaverse and legal frameworks around it

When any market receives investment in millions of dollars of hard-earned money, legal and regulatory frameworks become a necessity to ensure a degree of ethics, trust, and diligence

Updated: Jul 26, 2022 12:00:47 PM UTC
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In modern times, one’s persona is built more by actions on social media platforms than by actions in physical society. Why is this the case? Simply because technology allows you to extend your reach way past your geographical boundaries. This has caused a paradigm shift in the way social value is expressed and exchanged by people.

An acute observer will notice that this online world is transcending the physical one in more ways than most understand. The metaverse to me is the evolution of this social world, as we can facilitate digital property rights for the first time in human history.

What is the Metaverse?

Let us explore ‘Metaverse’ from the basics for those who have managed to navigate the internet today without coming across this dub and what it means.

Metaverse is a term coined by Neal Stephenson in his novel ‘Snow Crash’ in 1992 as a sci-fi concept. Today, if someone uses the term, they are trying to communicate the conception of a digital world where users have unique characters (akin to video game characters) to engage in social, economic, and political exchanges of information and value.

With the guarantee of ownership, people are buying property in various metaverses for millions of dollars because they believe that in the future, this digital society will be as populated as the cities of New York, Shanghai, Delhi, Tokyo, and Dubai.

Legal framework for the metaverse

When any market receives investment in millions of dollars of hard-earned money, legal and regulatory frameworks become a necessity to ensure a degree of ethics, trust, and diligence.

Let us explore some of these frameworks to see how the law is approaching this novel phenomenon:

Copyright Law

Identity, digital artwork, and digital buildings are all subjected to copyright law. Fraudulent actors may impersonate or unfairly use one's designs to generate value for themselves as this digital society can be viewed by all.

People may propagate real-world brands, identities, and creative works as their own in the metaverse. In this case, if one creates something in a metaverse that is similar to a copyrighted work in the real world, they may also be infringing on the copyright.

Also, if you create an avatar that is proved to be impersonating another brand, entity, or organisation, then the courts will order you to stop and may also seek monetary remuneration from you.

Contract Law

Contract laws in the real world govern the enactment of legal contracts made between two parties. In the metaverse, contract laws can apply to a range of activities, such as renting and selling virtual goods and services.

If you enter into a contract with somebody, all entities must live up to the contract and the courts can get involved to make sure that this is done.

Tort Law

Tort law is put in place to govern events such as property damage or personal injuries. Tort Law in the metaverse will apply to any harm that one user causes to another. This includes emotional distress and property damage in all senses.

One could use the courts in the same way as one would in the case of tort law violations in the real world.

Defamation Laws

In recent times, we have all realised the gravity of defamation. This should signal to most of the severe cases and the strong need for competent law practices for the same. Defamation laws protect people and entities from being subjected to false and damaging statements being publicised about them.

In the metaverse, the same standards will apply to users, meaning you will be held liable for your remarks and actions in this digital world if they are inflicting damage to the reputation of another person and entity unjustly.

Also read: What will learning in the metaverse look like?


As a lawyer, I can see that the metaverse will present its own set of challenges when it comes to law and regulation as this is a completely new structure of society. Components like jurisdictional law and such will be a challenge to fairly incorporate when it comes to digital property and careful consideration will have to be made to ensure a fair and a comprehensive framework is constructed.

That being said, I am interested and invested to see how things develop and take form. I have a feeling that the metaverse will evolve not only our digital interactions, but also the subject of law, as lawmakers will be challenged with fundamental questions of sovereignty, identity, property, deterrents, and justice which undoubtedly will lead to conscious reform.

The author is founding partner at Vis Legis Law Practice, Advocates.

The thoughts and opinions shared here are of the author.

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