A UK parliamentary committee has called for stricter regulations on sports fan tokens and the issuance of a code of conduct for nonfungible token (NFT) platforms by the government. The bipartisan committee, known as the Culture, Media and Sport Committee, has expressed concerns about copyright infringement related to NFTs and the potential risks associated with sporting organizations issuing digital assets.
In a press release on October 11th, committee members highlighted the most urgent issue as the threat to artists’ intellectual property rights due to the ease and speed at which NFTs can be created compared to the lengthy process for artists seeking to protect their rights. Committee chair Dame Caroline Dinenage emphasized that artists are at risk of having their work stolen and promoted without permission, while fraudulent advertisements further jeopardize investors in what is already a risky industry.
To address these concerns, the committee has recommended that the government collaborate with NFT marketplaces to establish a code of conduct that safeguards the rights of creators, consumers, and sellers, preventing the sale of infringing and potentially fraudulent material on such platforms.
Furthermore, the committee has raised alarms about the potential harms of sporting leagues or teams creating their own cryptocurrencies to offer to fans, and has called for a ban on such digital assets. This recommendation comes in response to several football organizations in the UK, including Manchester City and Tottenham Hotspur, releasing “fan tokens” to their followers and club members. While these tokens are marketed as providing exclusive rights and benefits, the committee argues that this is often not the case.
There are concerns that clubs may present fan tokens as a suitable form of fan engagement in the future, despite their price volatility and reservations among fan groups, as stated in the committee’s report. The committee believes that the fluctuating value of these tokens could financially harm fans who are unaware of the inherent risks associated with the asset. It is worried that clubs are using these volatile crypto asset schemes to extract additional money from loyal supporters, often with promises of privileges and perks that fail to materialize.
As a result, the committee has concluded that any measurement of fan engagement in sports, including the forthcoming regulation of football, should explicitly exclude the use of fan tokens.
Overall, the parliamentary committee’s recommendations aim to protect creators from copyright infringement and prevent potential financial harm to fans. By issuing a code of conduct for NFT platforms and advocating against the use of fan tokens, the committee seeks to ensure a fair and secure environment for artists and sports enthusiasts alike.
More detail via Cointelegraph here… ( Image via Cointelegraph )