A bipartisan parliamentary committee in the United Kingdom has called on the government to safeguard the rights of creators in the face of copyright issues related to nonfungible tokens (NFTs) and to tackle possible negative consequences arising from sports organizations venturing into digital assets.
Members of the Culture, Media, and Sport Committee emphasized in a press statement dated October 11 that the primary concern lies in the risk to artists’ intellectual property rights due to the speed and straightforward minting of NFTs, which stands in stark contrast to the slow procedures artists encounter when attempting to assert their rights.
“Artists are at risk of seeing the fruits of their hard work pinched and promoted without permission while fraudulent and misleading adverts add an extra layer of jeopardy for investors involved in what is already an inherently risky business,” said committee chair Dame Caroline Dinenage.
The committee’s report recommended that the government collaborate with NFT marketplaces to address infringement and fraud through a code of conduct. This code of conduct would protect creators, consumers, and sellers from infringing and fraudulent material sold on such platforms.
The committee also highlighted that sporting teams’ issuance of their cryptocurrency could cause potential harm and recommended banning such digital assets.
Similarly, Some football clubs in the U.K., including Manchester City and Tottenham Hotspur, released fan tokens to their followers and members, promising exclusive rights and benefits. However, the committee said that these promises were often unmet.
“We are also concerned that clubs may present fan tokens as an appropriate form of fan engagement in the future, despite their price volatility and reservations among fan groups,” the report said.
According to the committee, many fans, who were not aware of the potential risks of the assets, could suffer financial harm due to the high volatility of the tokens.
“In the world of sport, clubs are promoting volatile crypto asset schemes to extract additional money from loyal supporters, often with promises of privileges and perks that fail to materialize.”
The committee concluded that fan engagement measures, including future regulation of football, should not involve the use of fan tokens.
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