The UK government has been called upon by a parliamentary committee to take action against copyright infringement related to nonfungible tokens (NFTs) and address potential risks associated with sporting groups issuing digital assets. The Culture, Media and Sport Committee raised concerns about the ease and speed with which NFTs can be created, compared to the slow process artists face when trying to protect their intellectual property rights.
Dame Caroline Dinenage, the committee chair, highlighted the risk artists face of having their work used and promoted without their permission. She also mentioned the additional threats faced by investors due to fraudulent and misleading advertisements in the NFT market. In response to these concerns, the committee recommended that the government collaborate with NFT marketplaces to establish a code of conduct that safeguards creators, consumers, and sellers from infringing and potentially fraudulent content.
The committee also expressed concerns about sporting leagues or teams creating cryptocurrencies to offer to fans and called for a ban on such digital assets. It pointed out that various football organizations in the UK have already released “fan tokens” that are intended to provide exclusive rights and benefits to followers and club members. However, the committee argued that these tokens often fail to deliver on their promises.
The volatility of these tokens was another major concern raised by the committee. It argued that fans may suffer financial harm due to their unawareness of the inherently risky nature of these assets. The report emphasized that clubs should not promote volatile crypto asset schemes to extract additional money from loyal supporters.
The committee’s conclusion was that the measurement of fan engagement in sports, including future regulations in football, should explicitly exclude the use of fan tokens. This recommendation reflects the committee’s desire to protect fans from potential financial risks associated with these assets.
As NFTs continue to gain popularity and NFT marketplaces evolve, it is essential for governments to address the concerns surrounding copyright infringement and potential harms to consumers. The committee’s call for collaboration between the government and NFT marketplaces to protect creators and consumers is a step in the right direction. By establishing a code of conduct and banning certain digital assets that pose risks to fans, the government can ensure a fair and secure environment for all participants in the NFT market.