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NFT Copyright and Fan Token Worries Emerge in UK Parliament Report

The UK Parliamentary report highlights concerns about NFT copyright infringements and financial risks associated with fan tokens, calling for improved consumer protection.

NFT copyrightts and fant token wories arise in UK Parliament.
Creator: Andy LIU. Credit: Shutterstock. Copyright: 2021.

LONDON, UK – The UK's Culture, Media, and Sport Committee has raised significant concerns about the copyright implications of NFTs and the potential financial risks associated with fan tokens in a new report. This report underscores the need for improved consumer protection in these rapidly evolving digital spaces.

NFT Copyright Infringement

Dame Caroline Dinenage, Chair of the Culture, Media, and Sport Committee, voiced her apprehension, noting, "Traditional regulatory regimes have failed to protect creatives and consumers caught up in the volatile new crypto world." The committee's report, released on October 11, highlights that NFTs have not delivered the expected benefits but instead introduced tangible risks for creators and consumers alike. Concerns extend to how NFTs might disrupt existing regulatory frameworks and the possibility that the record-breaking digital asset sales of the past might not return.

In line with these concerns, recent data from DappRadar indicates a decline in NFT trading volume and sales compared to the previous year's first quarter. In response, the committee urges the government to ensure all participants in the cryptocurrency market are held accountable for consumer protection and emphasizes the importance of addressing copyright infringement issues within this rapidly growing industry.

Dinenage points out the risks by 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. The Government must make sure that everyone in the crypto chain is working to properly protect consumers and the rights of creators."

Fan Tokens and Financial Risks

The committee also raised concerns regarding fan tokens in sports, particularly in football. The report states that "the use of fan tokens in football does not count as an acceptable measure of engagement in the forthcoming regulation of the game." Fan tokens have become increasingly popular in the UK, with clubs like Manchester City (CITY), Everton (EFC), and Arsenal (AFC) issuing these tokens for their supporters.

However, the committee expresses worry that these tokens could put supporters at risk of financial harm and even damage the reputation of the clubs issuing them. The report further notes that fan tokens are being marketed as equivalent to legitimate club memberships, raising questions about their real value and impact.


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