In a bipartisan effort, a parliamentary committee in the United Kingdom (UK) has sounded a clarion call for the safeguarding of creators’ rights amidst the burgeoning realm of non-fungible tokens (NFTs).
The committee’s concerns extend beyond copyright infringement and embrace the broader implications of sporting groups entering the digital asset arena.
Their press release on 11 October emphasised that the most immediate and pressing challenge lies in the realm of artists’ intellectual property rights, which are exposed to potential infringement due to the effortless and rapid process of minting NFTs, in stark contrast to the laborious journey that artists must endure to enforce these rights.
Committee chair Dame Caroline Dinenage expressed:
“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 an accompanying report, the committee has proffered a comprehensive solution: an earnest call for the government to collaborate with NFT marketplaces in formulating a code of conduct.
This code of conduct, they propose, would serve as a protective barrier, simultaneously shielding the interests of creators, consumers, and sellers from the spectre of infringement and potential fraudulent activities within these digital domains.
The committee’s concerns do not end there.
They have cast a discerning eye on the expanding trend of sporting leagues and teams venturing into the realm of cryptocurrencies and tokenised assets, specifically those offered to fans.
The committee argues for a prudent exclusion of such tokens from any metrics measuring fan engagement.
This discussion arises in the wake of several prominent UK-based football organisations, such as Manchester City and Tottenham Hotspur, introducing “fan tokens” aimed at offering exclusive rights and benefits to their supporters and club members.
The committee, however, posits that the real-world benefits of these tokens often fall short of expectations.
The report pointed out that:
“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.”
Dame Caroline added:
“In the world of sport, clubs are promoting volatile crypto asset schemes to extract additional money from loyal supporters, often with promises of privileges and perks that fail to materialise.”
The committee has raised a valid concern surrounding the potential financial risks faced by fans who may be insufficiently informed about the inherent volatility of these tokens.
In light of these risks, the committee has reached a conclusive standpoint, asserting that any metrics designed to quantify fan engagement within the realm of sports, including forthcoming regulations in the domain of football, must unequivocally refrain from incorporating the utilisation of fan tokens.