NFT copyright and sports cryptos: U.K’s ‘most pressing issue’
- The committee proposed working with NFT marketplaces to combat infringements by introducing a code of conduct.
- It also expressed concern that sports clubs were promoting volatile crypto asset schemes to extract additional money from loyal supporters.
A bipartisan parliamentary committee in the United Kingdom has called on the government to take action to protect creators from copyright infringement related to Non-fungible Tokens [NFTs] and address potential issues arising from sporting groups issuing digital assets.
In an 11 October press release, the Culture, Media and Sport Committee emphasized its “most pressing issue.” This was the threat to artists’ intellectual property rights resulting from the ease and speed at which NFTs can be minted.
This is in contrast to the slower process that artists encounter when attempting to enforce their rights.
Dame Caroline Dinenage, the committee chair, expressed concern, stating,
“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.”
In their accompanying report, the committee made recommendations to the government. They proposed working with NFT marketplaces to combat infringements by introducing a code of conduct.
This code would serve to protect creators, consumers, and sellers from infringing and potentially fraudulent materials sold on these platforms.
The committee also raised concerns about the potential risks associated with sporting leagues or teams creating cryptocurrencies to offer to fans. They recommended the banning of such digital assets in this context.
Call for action on NFT copyrights and fan tokens
This call to action comes on the heels of several U.K.-based football organizations, including Manchester City and Tottenham Hotspur, releasing “fan tokens” to their followers and club members.
The committee contended that while these tokens were marketed as offering exclusive rights and benefits, this frequently did not hold true.
The report further stated,
“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 committee pointed out that the volatility of these tokens could cause financial harm to fans who were unaware of the inherently risky nature of the asset.
It also expressed concern that sports clubs were promoting volatile crypto asset schemes to extract additional money from loyal supporters. This was often with promises of privileges and perks that failed to materialize.
The committee’s conclusion was clear,
“Any measurement of fan engagement in sports, including in the forthcoming regulation of football, should explicitly exclude the use of fan tokens.”