A U.K. committee that consists of members from different political parties wants the nation’s government to work with non-fungible token marketplaces to address copyright infringement and introduce a code of conduct to better protect creators, according to a report released Wednesday.
Copyright infringement can occur when an NFT is created from a creative work without permission from the creators and owners. There have been several legal disputes in the U.K. and U.S.
“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,” Dame Caroline Dinenage MP, chair of the Culture, Media and Sport Committee, said in an accompanying press release.
The group started an inquiry into NFTs in November.
Some U.K. football clubs have been releasing tokens that give members access to membership perks like voting on club decisions, merchandise and unique experiences.
“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 report said.
Football fans speculating on sports-based crypto assets could cause financial harm to fans as well as hurt the reputation of football clubs, the committee said.
“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 materialize,” Dinenage said in the press release.
The committee also asked those who promote NFTs to take responsibility to protect consumers.
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