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Portrait of Matthew Nyman

Matthew Nyman

Of Counsel

CMS Cameron McKenna Nabarro Olswang LLP
Cannon Place
78 Cannon Street
London
EC4N 6AF
United Kingdom
Languages English
Banking & Finance

Matthew Nyman is Of Counsel in the Banking & International Finance practice at CMS London.  

Matthew acts on finance and technology (fintech) transactions and projects.  He specialises in the fields of cryptocurrency and blockchain, with a particular interest in decentralised finance (defi).  Matthew acts for a range of fintech businesses, including retail wealth platforms, cryptocurrency issuers, crypto exchanges and custodians, crypto mining pools and token issuing/trading platforms.  He specialises in start-ups and high-growth firms, including foreign business expanding into the UK and Europe. 

Matthew joined CMS in February 2021.  Since qualifying at a leading global law firm in 2007, Matthew was working in-house in fintech, mainly with start-up and high-growth businesses.  He also served briefly in the legal division of the UK’s Financial Conduct Authority (FCA).  Matthew has been sitting on the Fintech Scoping Forum of the Financial Markets Law Committee since 2017.  In November 2019, he was a contributor to the UK LawTech Delivery Panel’s Legal Statement on Cryptoassets and Smart Contracts.  In 2020, Matthew advised on and managed one of the very first successful applications to the FCA for registration of a cryptoasset business under the MLRs.  He also advises CryptoUK, the UK trade association for the cryptocurrency industry, of which CMS is a professional member.

Matthew specialises in finance and regulation, but has dealt with a broad range of corporate and commercial law matters, having served as General Counsel of an AIM-listed fintech investor.  In addition to his legal practice, Matthew has years of senior management experience, working closely with founders, boards and investors, and has held C-level executive positions responsible for risk, compliance and regulatory affairs. 

Matthew is very excited to be working with our equIP programme, where he uses his broad in-house experience to support the growth and development of early-stage businesses.

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"Matthew brings a thorough, meticulous and strategic approach, allowing him to solve complex problems with authority and conviction."

Client Feedback

"His calm approach really helped steady the ship, and his ability to grapple quickly and methodically with the challenges crypto and start-up firms generally face makes him a true asset."

`Client Feedback

Memberships & Roles

  • Fintech Scoping Forum of the Financial Markets Law Committee.
  • Financial Services Lawyers Association.
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Education

  • 2000 – Economics and Finance – London Metropolitan University, London.
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Financial Services & Regulation

Matthew Nyman is Of Counsel in the Financial Services Regulatory practice at CMS London.  

Matthew advises on regulation for finance and technology (fintech) transactions and projects, including applications for authorisation and regulatory affairs.  He specialises in the fields of cryptocurrency and blockchain, with a particular interest in decentralised finance (defi).  Matthew acts for a range of fintech businesses, including retail wealth platforms, cryptocurrency issuers, crypto exchanges and custodians, crypto mining pools and token issuing/trading platforms.  He specialises in start-ups and high-growth firms, including foreign business expanding into the UK and Europe. 

Matthew joined CMS in February 2021.  Since qualifying at a leading global law firm in 2007, Matthew was working in-house in fintech, mainly with start-up and high-growth businesses.  He also served briefly in the legal division of the UK’s Financial Conduct Authority (FCA).  Matthew has been sitting on the Fintech Scoping Forum of the Financial Markets Law Committee since 2017.  In November 2019, he was a contributor to the UK LawTech Delivery Panel’s Legal Statement on Cryptoassets and Smart Contracts.  In 2020, Matthew advised on and managed one of the very first successful applications to the FCA for registration of a cryptoasset business under the MLRs.  He also advises CryptoUK, the UK trade association for the cryptocurrency industry, of which CMS is a professional member.

Matthew specialises in finance and regulation, but has dealt with a broad range of corporate and commercial law matters, having served as General Counsel of an AIM-listed fintech investor.  In addition to his legal practice, Matthew has years of senior management experience, working closely with founders, boards and investors, and has held C-level executive positions responsible for risk, compliance and regulatory affairs. 

Matthew is very excited to be working with our equIP programme, where he uses his broad in-house experience to support the growth and development of early-stage businesses.

more less

"Matthew brings a thorough, meticulous and strategic approach, allowing him to solve complex problems with authority and conviction."

Client Feedback

"His calm approach really helped steady the ship, and his ability to grapple quickly and methodically with the challenges crypto and start-up firms generally face makes him a true asset."

`Client Feedback

Memberships & Roles

  • Fintech Scoping Forum of the Financial Markets Law Committee.
  • Financial Services Lawyers Association.
more less

Education

  • 2000 – Economics and Finance – London Metropolitan University, London.
more less

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30 April 2021
The guide to NFTs – sold as an NFT
What is an NFT? We sus­pect that if you’re read­ing this, then you’ve prob­ably at least heard of Bit­coin or Eth­er be­fore.What about tokens? Some­where across the in­ter­net (or life, but prob­ably the in­ter­net) people may have used the term ‘token’ to de­scribe crypto­cur­ren­cies like Bit­coin and Eth­er. It’s un­der­stand­able — but it’s not strictly true as there are some dif­fer­ences between tokens and crypto­cur­ren­cies like BTC and ETH.Pop­u­lar cryp­tos such as BTC and ETH run on their own block­chain. Con­versely, tokens are nat­ive cur­ren­cies which are cre­ated/dis­trib­uted as part of pro­jects which piggy­back off an­oth­er block­chain. Those pro­jects ef­fect­ively use that par­tic­u­lar block­chain as a host in­stead of run­ning off its own main­net. Oh, and it’s im­port­ant to re­mem­ber that tokens is­sued on the block­chain are di­git­al rep­res­ent­a­tions of a wide range of as­sets — you can’t phys­ic­ally touch these as­sets be­cause they live in the di­git­al world. In fact, cryp­tos like BTC and ETH are ex­actly the same. But you already knew that.The Eth­ereum block­chain is a real hot­spot for these types of pro­jects: Dapps (or if you’re really mad at it you can call it by its full name, dis­trib­uted apps).You may have heard this one really cool fea­ture of block­chain tech — that it provides real trans­par­ency over the pro­cess of re­cord­ing trans­ac­tions. We say real trans­par­ency, be­cause once you up­load in­form­a­tion on the block­chain, it’s there un­til the end of time for every­one to see and gives some ser­i­ous mean­ing to #no­fil­ter. But there’s an­oth­er cool thing that the Eth­ereum block­chain is known for: smart con­tracts. Without smart con­tracts, there are no Dapps, and hon­estly, what’s a world without Dapps?Here’s an­oth­er piece to the Eth­ereum/Dapps puzzle — there are a bunch of dif­fer­ent com­puters around the world called val­id­at­ors which are giv­en the job of val­id­at­ing all trans­ac­tions that go through the block­chain. This job is very en­ergy in­tens­ive so any­one who par­ti­cip­ates in keep­ing the (block­chain) com­munity thriv­ing is giv­en an in­cent­ive to do so. Enter tokens.When a val­id­at­or — let’s call it Bob — val­id­ates a trans­ac­tion, Bob gets giv­en a re­ward for car­ry­ing out that task. This re­ward is in the form of the nat­ive cryp­to­graph­ic token of a par­tic­u­lar pro­ject. If, for ex­ample, Bob par­ti­cip­ates in val­id­at­ing a trans­ac­tion for the Uniswap pro­tocol, it’ll re­ceive UNI tokens in re­turn. Like­wise, if it does the same thing for an­oth­er pro­ject, say Chain­Link, then it gets LINK as a re­ward. Both UNI and LINK are fun­gible tokens — tokens which are in­ter­change­able with oth­er as­sets of a sim­il­ar type. Say, for in­stance, you’re hanging out with a friend at a res­taur­ant, you both have some din­ner and a few bevs, and the wait­ing staff wants to kick you out be­cause it’s clos­ing time so they subtly hint at you by com­ing over with the card ma­chine. To make things sim­pler, you pay for the bill us­ing your card, but then straight after, you ping over a ‘split the bill’ re­quest on Monzo to your friend. Your friend could de­cide to trans­fer the money to you in one go — but they could equally de­cide to pay you in 2 sep­ar­ate pay­ments. The value of what they send to you to pay for their half of the bill doesn’t di­min­ish be­cause of the sep­ar­ate pay­ments. In fact, they could, in the­ory, pay you in 10 sep­ar­ate pay­ments and the value would still be the same. This is what we mean by fun­gib­il­ity.There is an­oth­er set of tokens how­ever, which don’t quite work in the same way: the non-fun­gible token or ‘NFTs’. These tokens de­rive their value from their unique­ness, or as they’re widely known by the main­stream press, their ca­pa­city to be­come a sought-after col­lect­ible — think Faber­gé egg; think Poké­mon cards; think old school com­ic book col­lect­ibles… but di­git­al. You can’t split these as­sets in­to dif­fer­ent parts, nor can you ex­change it for an­oth­er type of as­set. If you did, it just wouldn’t have the same value. It would be like claim­ing that the pristine 1938 Ac­tion Com­ics №1 copy that sold in 2014 for $3.2mil­lion is the same as a non-pristine copy, or is the same as a copy of Ac­tion Com­ics №2… just, no.Col­lect­ibles can be fun, ex­cit­ing, and own­ing a rare item on a very ba­sic level, does things to hu­man psy­cho­logy. But there are oth­er use cases for NFTs too, which is ex­plored be­low — don’t worry though, as we’ll briefly touch on some oth­er fun ex­amples in the col­lect­ibles space too. Ap­plic­a­tions Non-col­lect­ible use case­s­Cer­ti­fied Doc­u­ments. Cer­ti­fic­ates can be faked, and some­times they’re so good that you can’t even tell they’re coun­ter­feit. Up­load­ing cer­ti­fic­a­tion de­tails on the block­chain and check­ing the NFT dis­trib­uted against that in­form­a­tion is a great way to en­sure a cer­ti­fic­ate’s eli­gib­il­ity.Sports. Sim­il­ar to cer­ti­fic­ates, fraud­u­lent sports tick­et sales have been an is­sue for some time. Tick­et sales by way of NFTs helps to make sure that fans are get­ting genu­ine tick­ets, which they can veri­fy on the block­chain. Ad­di­tion­ally, there are also col­lect­ible use cases for sports from di­git­al col­lect­ibles to NFT-backed sports fantasy games.Loy­alty Points. The concept of re­ward tokens isn’t new — Mc­Don­ald’s, for in­stance, gives you a loy­alty card for hot drinks. 6 stick­ers on your loy­alty card and you can go get your­self a hot drink on the house. These cards can be eas­ily mis­placed though. The loy­alty points NFT use case isn’t par­tic­u­larly look­ing to do any­thing nov­el — it just means that if your loy­alty points are dis­trib­uted by way of NFTs, you can’t mis­place your points be­cause it’s already on the block­chain, which you just can’t really lose.Art. And Memes. Do Memes count as art? A self-por­trait of Sophia the Ro­bot cre­ated in col­lab­or­a­tion with Itali­an artist An­drea Bon­aceto re­cently sold for nearly $700,000. Plus, the Overly At­tached Girl­friend meme re­cently sold for $411,000. Yup, you read both cor­rectly. A ro­bot and a meme. Lit­er­ally.Mu­sic. Lind­sey Lo­han re­cently partnered with Tron to re­lease her new single “Lul­laby” by auc­tion. Not long be­fore that, Kings of Le­on re­leased their al­bum “When You See Your­self” as NFTs. They re­leased three types: one which rep­res­ents a spe­cial al­bum pack­age, one which of­fers ad­vant­ages dur­ing live shows such as front-row seats, and an­oth­er which rep­res­ents ex­clus­ive au­di­ovisu­al art.Fine Wine. OpenSea, a mar­ket­place for di­git­al col­lect­ibles, has brought fine wine trad­ing to its plat­form. It al­lows par­ti­cipants to trade fine wine via NFTs and re­deem the phys­ic­al bottles at the end of each sale. In­tel­lec­tu­al Prop­erty When you buy a book, you do not ex­pect to own the copy­right in the lit­er­ary work which is between the cov­ers. All you have is the phys­ic­al copy and, un­der a copy­right concept called “ex­haus­tion”, you can sell that copy without any need to ob­tain the cre­at­or’s ap­prov­al.Even be­fore you move in­to the world of NFTs, buy­ing a piece of di­git­al con­tent is dif­fer­ent. What you are ac­tu­ally buy­ing is a li­cence to down­load/stream the con­tent and use it in the ways defined by the li­cence. So, I may be able to share e-books I buy with oth­er mem­bers of my fam­ily, if that is how the e-book sys­tem is con­figured but I can’t re-sell them once I have read them.So buy­ing an NFT is, in IP terms, like buy­ing any oth­er piece of di­git­al con­tent, in that my right to any copy­right ma­ter­i­al in the NFT is defined by the li­cence; the dif­fer­ence be­ing that with an NFT, the li­cence is also locked in­to the token and val­id­ated through the block­chain.From the per­spect­ive of the NFT cre­at­or, it is there­fore im­port­ant to en­sure that you own whatever you are pur­port­ing to grant a li­cence for. And own­er­ship of con­tent is not al­ways straight­for­ward — for ex­ample, take a mu­sic col­lect­ible NFT fea­tur­ing some art­work and a sound re­cord­ing. The art­work is likely owned by the cre­at­or of that art (or the per­son who com­mis­sioned it, if they drew up a suit­able con­tract). The sound re­cord­ing will typ­ic­ally be owned by the re­cord la­bel and the copy­right in the songs which are re­cor­ded for the sound re­cord­ing will be owned by the mu­sic pub­lish­ers (of­ten a song will have mul­tiple song­writers, each rep­res­en­ted by a dif­fer­ent pub­lish­er). So, in or­der to launch the NFT, you will need deals with all of these people, all of whom will want both a com­mer­cial be­ne­fit and they may also want to en­sure their cre­at­ive in­teg­rity is re­spec­ted.At the oth­er end of the spec­trum, there is no reas­on why an NFT could not be used to sell frac­tion­al own­er­ship of some IP rights — a form of se­cur­it­isa­tion, which will no doubt be ex­plored in the com­ing weeks and months. Fin­an­cial Reg­u­la­tion Al­though the reg­u­la­tion of crypto is very new, it was de­veloped be­fore the re­cent ex­plo­sion in pop­ular­ity of NFTs. As a res­ult, NFTs are not spe­cific­ally ad­dressed in the cur­rent laws or policies. However, this does not mean that they are not reg­u­lated. But it also does not mean that they are reg­u­lated. #Con­fused? You should be!The non-fun­gible char­ac­ter of a token will not af­fect its reg­u­lat­ory status. It is the oth­er char­ac­ter­ist­ics and func­tion of the token that will de­term­ine if and how it is reg­u­lated.If a token has char­ac­ter­ist­ics sim­il­ar to those of tra­di­tion­al se­cur­it­ies, like shares, deben­tures or units in a col­lect­ive in­vest­ment scheme, it will be con­sidered a “se­cur­ity token”. A token which func­tions as elec­tron­ic money will be con­sidered an “e-money token”. Busi­nesses con­duct­ing activ­it­ies con­nec­ted to these “reg­u­lated tokens”, such as is­sue, sale or mar­ket­ing, will be reg­u­lated by the Fin­an­cial Con­duct Au­thor­ity (FCA) in the same way as tra­di­tion­al fin­an­cial ser­vices pro­viders.If the token does not con­fer any rights on the own­er, oth­er than the abil­ity to hold, buy or sell, then it will be con­sidered an “ex­change token” and will not be reg­u­lated. If the token con­fers rights to ob­tain goods or ser­vices, in­clud­ing rights to oth­er tokens, it will be con­sidered a “util­ity token” and will not be reg­u­lated. If a token com­bines the char­ac­ter­ist­ics of an “ex­change token” and a “util­ity token”, it will also be un­reg­u­lated.Most com­mon crypto­cur­ren­cies, in­clud­ing BTC and ETH, are con­sidered to be ex­change and/or util­ity tokens and as such they are un­reg­u­lated.So where do NFTs fit in? The NFTs in the use cases dis­cussed above (col­lect­ibles and non-col­lect­ibles) will fall in­to the ex­change and/or util­ity token cat­egor­ies and so will be un­reg­u­lated. But in the­ory an NFT could have char­ac­ter­ist­ics sim­il­ar to those of tra­di­tion­al se­cur­it­ies, in which case it would be reg­u­lated as a se­cur­ity. It is very un­likely that an NFT could have the char­ac­ter­ist­ics of e-money, as fun­gib­il­ity is an es­sen­tial char­ac­ter­ist­ic of money. AML Reg­u­la­tion In gen­er­al, if a busi­ness provides the ser­vices of ex­change or cus­tody of crypto, it will be sub­ject to the Money Laun­der­ing Reg­u­la­tions (MLRs). Such a busi­ness must be re­gistered with the FCA, per­form KYC checks on its cus­tom­ers and mon­it­or their trans­ac­tions, along with oth­er AML re­quire­ments. “Ex­change” ap­pears to cov­er any busi­ness that sells cryp­tos to cus­tom­ers in re­turn for fi­at or crypto, in­clud­ing where the busi­ness also cre­ates or is­sues the crypto. “Cus­tody” in­cludes a busi­ness hold­ing crypto on be­half of cus­tom­ers or hold­ing their private keys. Busi­nesses that only provide un­hos­ted (non-cus­todi­al) wal­lets or soft­ware are not sub­ject to AML re­quire­ments.As with the fin­an­cial reg­u­la­tion dis­cussed above, NFTs are not ex­pli­citly in­cluded or ex­cluded from the MLRs. The defin­i­tion of “cryptoasset” in the MLRs is “a cryp­to­graph­ic­ally se­cured di­git­al rep­res­ent­a­tion of value or con­trac­tu­al rights that uses a form of dis­trib­uted ledger tech­no­logy and can be trans­ferred, stored or traded elec­tron­ic­ally”. An NFT could fit in­to this defin­i­tion or not, de­pend­ing on its char­ac­ter­ist­ics, and it ap­pears the de­term­in­ing factor would be wheth­er it is a “rep­res­ent­a­tion of value or con­trac­tu­al rights”. For ex­ample, a sports tick­et would rep­res­ent­a­tion of the con­trac­tu­al right to at­tend the event. A di­git­al art­work, like a meme, might not ne­ces­sar­ily rep­res­ent any value or con­trac­tu­al rights.However, a re­cent con­sulta­tion from HM Treas­ury on crypto reg­u­la­tion sug­gests that it views the MLRs defin­i­tion as in­clud­ing NFTs in prin­ciple. Hope­fully the po­s­i­tion will be cla­ri­fied by the reg­u­lat­ors soon. For now, wheth­er a par­tic­u­lar NFT is sub­ject to the MLRs will need to be de­term­ined on a case-by-case basis, look­ing at both the token it­self and the busi­ness that is provid­ing ex­change or cus­tody for it. NFTs and Emtech Trans­ac­tions Many fea­tures of Emtech trans­ac­tions that law­yers work on are fea­tures of NFTs. For ex­ample, NFTs:can be pro­gram­mable con­tracts (also known as smart con­tracts). They can be set up to deal neatly with the as­pir­a­tion of cre­at­ors to con­tin­ue to be­ne­fit from the com­mer­cial life of their work. For ex­ample, the token can have terms that will auto­mat­ic­ally pay a share of fu­ture sale pro­ceeds to the ori­gin­al cre­at­or. Leg­al takeaway — smart con­tracts are cap­able of giv­ing rise to bind­ing leg­al ob­lig­a­tions un­der Eng­lish (and oth­er jur­is­dic­tions’) law. But, they still need to sat­is­fy the tra­di­tion­al rules on form­a­tion of con­tracts (parties, en­ter­ing in­to a bar­gain, in­ten­ded to be en­force­able against them, with terms that are clear enough to an out­sider, and not of­fend­ing against any man­dat­ory rules of pub­lic policy). And, this re­quires some leg­al ana­lys­is of smart con­tracts (how they: split between nat­ur­al lan­guage and code, deal with mar­ket­ing rep­res­ent­a­tions, in­ter­act with laws on sale of goods, are in­ter­preted, are signed, deal with gov­ern­ing law and jur­is­dic­tion).over­come the ques­tion of rem­ed­ies and smart con­tracts. Pro­gram­mable con­tracts in­cor­por­ate the trans­fer of value. They there­fore don’t need to be “en­forced” in prac­tice through court ac­tion. Leg­al takeaway — rem­ed­ies for deals gone south will rely less on con­trac­tu­al dam­ages and more on rem­ed­ies from pre-con­tract deal­ings, torts, in­solv­ency rules and equity.can be used as col­lat­er­al. They there­fore ex­tend the mar­ket for al­tern­at­ive as­set lend­ing. There is a small but ex­pert group of lenders already provid­ing li­quid­ity against (il­li­quid) fine art as­sets. NFTs are prop­erty, they can se­cure loans and, if they trade more fre­quently than phys­ic­al fine art, valu­ations will be more pre­dict­able than in a mar­ket where few pieces are sold each year. Leg­al takeaway — tak­ing se­cur­ity in­terests over in­tan­gible di­git­al prop­erty is dif­fer­ent to tak­ing se­cur­ity in­terests over tan­gible phys­ic­al prop­erty so deal doc­u­ments need to be re­written­are an entry point to De­Fi. They can be traded and used as col­lat­er­al on De­Fi plat­forms and this will bring new par­ti­cipants rep­res­ent­ing dif­fer­ent in­terests to sit along­side those cur­rently deal­ing with fun­gible tokens on the plat­forms. Leg­al takeaway — this is likely to boost AML in De­Fi as the art world has been through a sim­il­ar pro­cess of en­sur­ing that reg­u­la­tions on source of wealth are fol­lowed. We cre­ated an NFT We jumped on the NFT band­wag­on and made an NFT out of this note on NFTs (chal­lenge: how many times can you get ‘NFT’ in­to one sen­tence…). You can take a look at it here: That-NFT-o… NFT for sale at Mint­able.app The NFT is a di­git­al rep­res­ent­a­tion of this note. What the pur­chaser gets is the ori­gin­al form doc­u­ment that this note came in. We should prob­ably also men­tion that there’s only one of these NFTs in ex­ist­ence, so once one per­son buys it, it’s gone! How to make NFTs (for non-tech­ies) Step 1: Check out your plat­form op­tions in terms of mint­ing your NFT. There are plenty of great ones out there like Rarible, Mint­able, Opensea and Found­a­tion. Step 2: For our NFT, we used Mint­able as our chosen plat­form, and we chose the ver­sion which is powered by our friends at Zil­li­qa. Here’s Zil­li­qa’s web­site too, for good meas­ure.Step 3: Cre­ate and list your NFT. Mint­able has a very easy to fol­low set-up, and it auto-gen­er­ates the NFT for you — no need to be a total tech­ie!Step 4: Re­lease an NFT about the fact you’ve just re­leased an NFT to pro­mote the fact that you’ve re­leased an NFT. #NFT­cep­tion­NB: We also worked with our oth­er friends in the space, NFT42 about how best to launch this pro­ject, and they gave us plenty of use­ful ad­vice. PSA This pro­ject was a col­lab­or­a­tion between CMS (Lon­don) and the Crypto Curry Club — a huge thanks to Erica Stan­ford for her valu­able in­put in this. If you’d like to get in touch with the team, you can con­tact us by send­ing an email to: [email protected] for CMS, or [email protected]­curry­c­lub.com to say hello to Erica.