The CMS Committee has urged government to implement a code of conduct to protect NFT creators, intellectual property and sport fan token holders.
Artists and investors are constantly aware of one sobering truth in Web3: if things go south, you’re on your own.
Change may soon be on the horizon, though. Today, the UK Culture, Media and Sport Committee, a cross-party group responsible for scrutinising parts of government, issued a report urging parliament to implement measures to protect NFT creators from copyright infringements.
The report paid particular heed to sport fan tokens, which potentially subject fans to financial harm.
“Traditional regulatory regimes have failed to protect both creatives and consumers caught up in the volatile new crypto world,” said Dame Caroline Dinenage MP, Chair of the CMS Committee.
“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.”
The Committee recommended the government to “engage with NFT marketplaces” and built a code of conduct to protect consumers, and to let copyright holders enforce their rights.
Sport NFTs are a particular concern for the Committee
Sport NFTs have gained huge traction over the past year. The Committee acknowledged this, stating they offer a new revenue stream for professional athletes and clubs.
However, the Commission outlined that while there is “little to no financial risk” for sporting clubs, NFTs are inherently risky for the fans who invest in them.
The report concluded that the “unique relationship between clubs and fans” presents risks not only to fans, but to the reputation of clubs themselves.
“We recommend that any measurement of fan engagement in sports, including in the forthcoming regulation of football, should explicitly exclude the use of fan tokens,” the report stated.
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