A bipartisan parliamentary committee has urged the British government to protect creators from copyright infringement linked to non-fungible tokens (NFTs) and address potential harm from sports groups issuing digital assets.
In the newspaper of October 11 launchMembers of the Culture, Media and Sport Committee warned that the “most pressing issue” is the risks to artists’ intellectual property rights that arise from the ease and speed of minting non-fungible tokens, compared to the slow process for artists looking to enforce their rights.
“Artists are at risk of seeing the fruits of their hard work being extracted and promoted without permission, while fraudulent and misleading advertising adds an additional layer of risk for investors involved in an inherently risky business,” said Committee Chair Dame Caroline Dinenage.
In accompaniment a reportThe committee recommended that the government work with NFT marketplaces to address these abuses by introducing a code of conduct that protects creators, consumers and sellers from infringement and potentially fraudulent material sold on these platforms.
The committee also warned of potential harm to sports leagues or teams that create cryptocurrencies to offer to fans, and called for these digital assets to be banned.
It follows several UK football organisations, including Manchester City and Tottenham Hotspur, issuing ‘fan codes’ to followers and club members. Purchasing such tokens is supposed to provide exclusive rights and benefits, but the Commission claimed that this often fails to be the case.
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“We are also concerned that clubs may offer fan tokens as a convenient form of fan engagement in the future, despite the volatility of their prices and reservations among fan groups,” the report said.
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The commission claimed that the volatility of these tokens could cause financial harm to fans, who were unaware of the “inherently risky” nature of the asset.
“In the world of sports, clubs promote volatile crypto asset schemes to extract extra money from loyal supporters, often with promises of perks and perks that never materialise.”
The committee concluded that “any measurement of fan participation in sport, including the upcoming organization of football, must explicitly exclude the use of fan symbols.”
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