Prior to the last general elections, in its manifesto, the Nationalist Party had come up with a €1 billion digital vision for Malta that included the metaverse, an immersive virtual reality version of the internet where people can interact with digital objects and digital representations of themselves and others and can move more or less freely from one virtual environment to another that was launched globally some time ago. A Maltese iGaming expert, Trevor De Giorgio, was reported to have stated that the PN was dreaming of the metaverse and wanted to invest in it by regularising it. Regularising it is easier said than done.

The metaverse is already looking far from the harmonious utopia that Meta, and particularly Mark Zuckerberg, had painted it as. In fact, it creates more problems than solutions and raises more questions than it answers. For those of us who concentrate on the here and now, it is something that hardly merits a second thought. There is no doubt that it will be an experience like no other, but we still need to determine if it will be for better or for worse. But above all these issues, there are a number of legal considerations to be made that any eventual Maltese administration deciding to embrace this latest fantastic development will have to confront and overcome.

The legal implications will be enormous. There will be a great need to open creative minds first and, at the very end, apply critical thinking and legal intellect. What led us here? First came layer one: blockchain, an immutable database to store information, in concert with the proliferation of cryptocurrencies, an ability to transfer value akin to currency initially but later representing all assets. The tokenization of assets is a seminal concept and means that anything physical, or, more important in this instance, digital, can be proven and has authority via code on an immutable ledger. The latest manifestation of this authenticated representation of ownership are NFTs (non-fungible tokens), and their popularity is the slippery slope of the metaverse.

In the metaverse, people will interact, transact, own assets, have relationships, build things and companies, create intellectual property (IP), have copyright issues, and advertise. Further, crimes may happen, insurance will likely be developed, and a massive host of other IRL (in real life) concepts will evolve, and that will require legal professionals to be involved. The implications of the metaverse for the legal community and within the regulatory community, as well as every other facet, are enormous. While this space is being built, it is still early. Over the course of the next several years, the metaverse and all its implications will move from the fringe to a more important arena for lawyers to contemplate and eventually address. Now is the time for those lawyers to apply their critical thinking and legal intellect.

The elementary question to be asked is: who or what governs the metaverse? Transactions in the metaverse are generally monetized using cryptocurrency or NFTs (non-fungible tokens). While it is difficult to say whether this is simply a trend or a new and exciting form of capital investment, these kinds of transactions raise some interesting legal questions. What kind of ownership is precisely included in a transaction for digital art, for example? Ownership in the metaverse is nothing more than a form of licencing or the provision of services. In such instances, true ownership still lies with the owner. This may mean, for example, that the buyer cannot sell the item without permission from the true owner.

Virtual real estate has also become an NFT. Do the intricacies of land law apply here? For example, will real-world legislation cover trespassers on private land in the metaverse? Can you take out a mortgage on your virtual property? The metaverse can also potentially transform itself into a dark web marketplace dealing in illegal drugs and weapons, for example. Within the environment of VR and gaming, for example, upon whom rests the responsibility to ensure the safety of users? What kinds of laws can be put in place to safeguard against this happening in the metaverse? It would be ideal to have a global regulatory authority overseeing it, although this would be difficult to implement. Another possible legal implication of the metaverse is around data and data protection. It will expose new categories of our personal data for processing. This might include facial expressions, gestures, and other types of reactions an avatar could produce during interactions in the metaverse. The EU’s General Data Protection Regulation (GDPR) could arguably apply to it, but given its novel nature, to ensure that users’ rights are protected, the processes governing informed consent around data processing may need to be revisited.

Talking of avatars, when users interact through their avatars, we may have situations where some kind of altercation occurs that would equate to breaking the law if it took place between people in the real world. How could we make an avatar responsible for their actions in the metaverse? This would be complicated because it would mean that we would need to attribute a legal personality to the avatars, giving them rights and duties within a legal system and allowing them to sue or be sued. What kind of standards and criteria need to be in place to distinguish between a "legal" avatar and the true legal person who operates that avatar? These issues should all be addressed before the metaverse becomes mainstream.

As with any groundbreaking technological development, the metaverse will raise novel and complex legal issues. As its practical applications continue to broaden and evolve with improvements in technology, so too will the legal and regulatory challenges. Adding to an already complex field of play, the metaverse is designed to be deeply interconnected, seamless, and ungrounded in physical space. Legal practitioners will be required to navigate questions of jurisdiction, territoriality, and conflicts of laws, none of which have been neatly resolved for even the current iteration of the Internet, let alone fully realised virtual worlds with an even greater degree of interaction and user immersion.