The UK’s culture, media and sports (CMS) committee is advising the government to collaborate with NFT marketplaces to address copyright violations.
Comprising a group of MPs, the committee initiated an inquiry in Nov. 2022 to explore the impact of blockchain and NFTs on policy areas within their jurisdiction.
In a report released Wednesday, they pinpointed intellectual property risks as their primary concern during the investigation.
NFTs featuring art can infringe on artists’ intellectual property rights and are found on online platforms with limited ways to resolve and compensate for such issues, they said.
“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,” Caroline Dinenage, Conservative MP and Chair of the CMS Committee, said in a statement.
“The government must make sure that everyone in the crypto chain is working to properly protect consumers and the rights of creators,” she added.
The committee noted that an opportunistic user might, for instance, use inaccurate information, like misattributing the creator of an artwork, potentially impacting the creator’s future ability to profit from the artwork.
To tackle this issue, they recommended establishing rules for online marketplaces, including NFT platforms, to safeguard creators, buyers and sellers from fake or illegal content.
The group is also worried that NFTs are being used in professional sports to generate extra income from global fans and, in some cases, as a substitute for fan interaction.
Fan tokens are created to boost fan interaction with sports teams or organizations. When fans buy these tokens, they gain access to various perks, rewards and chances to connect with their favorite teams or clubs in return.
In the context of sports, the report suggested that employing fan tokens in football should not be considered a valid gauge of engagement, due to price instability and concerns raised by fan groups.
“The unique relationship between clubs and fans means that fan speculation on sport-based cryptoassets carries a real risk of financial harm to fans and reputational harm to clubs,” the report said.
The committee also urged the government to tackle deceptive or dishonest NFT advertising.
They recommended a regulatory framework that mandates the entire advertising process to minimize potential harm to consumers arising from NFT marketing.
Recent UK regulations mandate that crypto companies must ensure their advertising is transparent, equitable and prominently displays risk notifications.
Don’t miss the next big story – join our free daily newsletter.
Follow Sam Bankman-Fried’s trial with the latest news from the courtroom.
Source: https://blockworks.co/news/uk-sports-committee-football-nfts