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British MPs call for measures to address NFT copyright violations and cryptocurrency fan tokens.
A bipartisan parliamentary committee has called on the British government to safeguard creators from copyright violations linked to nonfungible tokens (NFTs) and to tackle potential risks posed by sports organizations issuing digital assets.
In a press release dated Oct. 11, members of the Culture, Media and Sport Committee highlighted that the “most pressing issue” is the threat to artists’ intellectual property rights due to the rapid and straightforward process of minting NFTs, in contrast to the lengthy procedure artists must undertake to assert their rights.
“Artists are vulnerable to having the results of their labor appropriated and promoted without consent, while deceptive and misleading advertisements create an additional layer of risk for investors engaged in what is already a fundamentally precarious industry,” stated committee chair Dame Caroline Dinenage.
In a related report, the committee suggested that the government collaborate with NFT marketplaces to mitigate these violations by establishing a code of conduct aimed at protecting creators, consumers, and sellers from infringing and potentially fraudulent content available on such platforms.
The committee also cautioned about the possible dangers of sports leagues or teams launching cryptocurrencies for fans and advocated for a ban on such digital assets.
This follows several football organizations based in the United Kingdom, including Manchester City and Tottenham Hotspur, introducing “fan tokens” to their supporters and club members. Acquiring these tokens is intended to provide exclusive rights and benefits, but the committee asserted that this often does not occur.
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“We are also apprehensive that clubs might portray fan tokens as a suitable means of fan engagement in the future, despite their price fluctuations and concerns among fan groups,” the report indicated.
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The committee asserted that the volatility of these tokens could lead to financial detriment for fans, who may not be aware of the “inherently risky” characteristics of the asset.
“In the realm of sports, clubs are endorsing volatile crypto asset schemes to extract additional funds from devoted supporters, frequently with assurances of benefits and privileges that do not materialize.”
The committee concluded that “any assessment of fan engagement in sports, including in the upcoming regulation of football, should explicitly exclude the use of fan tokens.”
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