A cross-party committee in the United Kingdom has released a report urging the government to work together with non-fungible token (NFT) marketplaces to address the issue of copyright infringement. The committee’s recommendations include the establishment of a code of conduct to protect creators. Dame Caroline Dinenage MP, chair of the Culture, Media and Sport Committee, expressed concerns about the unauthorized use and promotion of artists’ work and the risks faced by investors in the NFT market.
Concerns Over Unauthorized Use and Promotion of Artists’ Work
“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
The committee launched an inquiry into NFTs to gain a deeper understanding of this growing phenomenon. In addition to addressing copyright infringement, the report also highlighted concerns regarding the issuance of tokens by U.K. football clubs. These tokens offer members exclusive benefits and experiences, but the committee emphasized the potential financial risks associated with fans speculating on sports-based crypto assets.
Responsibility for Consumer Protection and Compliance
The committee stressed the importance of those promoting NFTs assuming responsibility for consumer protection. This call for accountability underscores the need to safeguard individuals in this emerging market. To this end, the United Kingdom Financial Conduct Authority (FCA) has implemented new rules that require crypto firms to register with the financial regulator and have their marketing materials approved by an FCA-authorized firm.
“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.”
– Dame Caroline Dinenage MP
The FCA’s updated rules include clear warnings about the risks associated with crypto investments and the requirement for fair, transparent, and non-misleading marketing materials. Additionally, a 24-hour cooling-off period for new customers has been introduced.
While some technically challenging features have been given an extended deadline for implementation, crypto firms are expected to adhere to the “core rules” from October 8. Leading crypto exchanges such as Coinbase, Revolut, and Binance have already made changes to their mobile and web applications to comply with the new regulations.
It is crucial for market participants to recognize the need for collaboration, consumer protection, and adherence to regulations as the popularity of NFTs continues to grow. By taking these measures, the industry can strive towards a more secure and sustainable future.
